Marshall Islands SOV to replace the dollar: For the first time, a sovereign country issues its own legal-based currency in digital form.
The record goes to the Marshall Islands, which will have their official national cryptocurrency .
The newly issued currency, called SOV (which stands for “sovereign”), will replace the US dollar currently in circulation.
After the legislators approved in March the historical law, the “Declaration and Issuance of the Sovereign Crypto Currency Act 2018“, the officials of the country member of the United Nations welcomed the initiative as “the right path into the future”.
These are the words spoken in Reuters by David Paul, assistant minister of the president of the Oceanian nation, recalling that as an independent sovereign country, “we have the right to issue a currency in any of its forms, be it digital or ‘fiat’ “.
Other governments have discussed the possibility of issuing a crypto fiat, including China, South Korea, Estonia, Switzerland and Iran, while others, like Venezuela with the petro, have issued parallel digital coins to circumvent Western sanctions.
With the oil-related crypto, Caracas was able to raise $ 735 million in funding only on the first day of pre-sales in February.
Banks forced to accept the crypto fiat
The Marshall Islands have a population of just 53,000 inhabitants, so the change – though of historic significance – will not have an impact on the lives of many. That said, it is a significant step towards gradual recognition and legitimation by authorities and individuals.
Now financial institutions, such as banks and lending companies, situated on the island will be forced to accept the SOV currency as a payment method. US dollars will not be removed from circulation, but will no longer be considered the official currency.
To avoid a surge in inflation, the currency will be issued through an ICO in which the offer will be limited at 24 million tokens. The date of the first presale is still unknown. For the operation, the government turned to Neema, an Israeli FinTech startup with which it entered into a partnership.
The currency uses the Yokwe identification protocol (it means “hello” in the local language), in which the user must identify himself on the blockchain. The structure allows to solve the issue of anonymity and pseudonyms, which has precluded Bitcoin and other crypto the possibility of achieving widespread adoption.