The Marshall Islands will launch the world's first legal tender crypto-currency to raise some hard cash to pay bills and boost the economy. The parliament has passed a law to create its own digital currency.
To issue the crypto-currency, the Marshall Islands nation has teamed up with a company Neema from Israel.
The Neema will issue 24 million units of the Sovereign digital currency SOV. However, the numbers are capped to prevent inflation.
First Country in the world
The Marshall Islands, a Pacific island nation has become the first country in the world to recognise a crypto-currency or digital currency as its legal tender after passing a law through its parliament to create the digital "Sovereign," or SOV.
The digital currency in the island nation will have an equal status with the US dollar as a form of payment.
The US dollar is the Pacific island nation's current currency.
Earlier, Venezuela became the first country to launch its own crypto-currency ‘Petro’ in February backed by crude oil reserves.
However, the SOV will be recognized in law as legal tender unlike the Petro, which will hold equal status as the US dollar.
Venezuela to launch ‘Petro’ cryptocurrency
What’s the plan?
The Marshall Islands plans to sell some of the digital currency to international investors and spend the proceeds.
Therefore, Six million SOVs will be given to international investors, and money raised through this will be used to help pay the budget, invest in anti-global-warming projects, and supporting people still affected by US nuclear testing.
From the issued 24 million coins, half will go to the government and the other half to the Israeli financial technology startup helping with the plans.
Island’s residents will receive 2.4 million SOVs.
As per the government, the crypto-currency SOV will necessitate the users to identify themselves, hence avoiding the ambiguity that has kept away Bitcoin and other crypto-currencies from global support.
According to the President Hilda Heine, it is a historic moment for people, finally issuing and using our own currency, alongside the USD (U.S. dollar). It is another step of manifesting our national liberty.
The government hopes that the people of this country will use the SOV for everything from paying taxes to buying groceries.
The Marshall Islands
The Republic of Marshall Islands is an island country located in the Pacific Ocean. The country is part of the larger island group of Micronesia having a population of 53066 (2016).
The Marshall Islands is closely aligned with the U.S. under a Compact of Free Association and uses the dollar as its currency. Under the compact, the US provides the Marshall Islands with about USD 70 million each year in assistance. The U.S. runs a military base on Kwajalein Atoll.