The Marshall Islands is a small island nation in the Pacific Ocean, but this country doesn’t have a national currency. Currently, the nation uses the US dollar as the national currency. This has been continuing since its independence from the US in 1986, and even before that during the time of US administration of the island which lasted from 1945-1986, the US dollar was used on the island. The nation received a large amount of money from the US government as compensation for the nuclear tests conducted on the islands between 1947 to 1962, but US foreign aid will stop by the year 2023 and rising sea level threatens life on the island. The island’s government views crypto as a solution to both these problems. Let’s explore a few peculiar features of the Marshall island cryptocurrency known as the Marshallese sovereign (SOV).
The idea and discussion about the Marshallese sovereign (SOV) have been going on for some time and on September 10th at Singapore, the Republic of the Marshall Islands (RMI) announced that it is going forward with the currency and announced the next step in the process. The announcement came at the “Invest: Asia Cryptocurrency Conference” in Singapore. SOV will be introduced in a highly visible way before the circulation in the Marshall Islands is initiated. Even though the details are not out yet, it is expected that investors can buy into SOV during initial sales, which is expected to bring in the funds necessary to back the currency.
TRMI (Timed Release Monetary Issuance)
One of the unique features of the SOV coin offering is the Timed Release Monetary Issuance (TRMI). The currency will be introduced through a sale over an extended period of time. This kind of step by step approach is adopted to make sure that the feel of limited edition(FOMO/fear of missing out) does not affect the sale of the currency. The intention is to stop speculation from making the price of SOV explode. Even though it might sound counterintuitive, since why wouldn’t a government want its currency to explode in value? Because there is another side to speculation. Investors might dump their assets which will crash the price, leading to a lack of confidence.
A tamed beast
Another feature of SOV that makes it stand out is that it is fully regulatory compliant. Don’t get it confused with regulatory compliant crypto exchanges. There, the customer is required to fill out all kinds of information about themselves in order to trade. But owning a crypto doesn’t usually require anything and trading peer to peer can circumvent the restriction placed at exchanges. In the case of SOV, it will have KYC, AML, CFT, sanction list filtering, and identity built into its technology – all the while providing very strong guarantees for privacy. SOV is no wild west.
SOV, unlike other cryptocurrencies, will be a legal tender, which means that for trade and service within the country, SOV must be accepted. This means universal adoption by the islanders, and this is unique to SOV, one which even the crypto by Venezuela and Iran doesn’t have. SOV being a legal tender by one of the members of the UN, it opens the door for SOV, crypto being traded on Forex exchanges which is a monumental achievement. The outcome of this, if any, is something that will only be revealed with time.
doesn’t have. SOV being a legal tender by one of the members of the UN, it opens the door for SOV, crypto being traded on Forex exchanges which is a monumental achievement. The outcome of this, if any, is something that will only be revealed with time.
SOV combines the best of the two worlds, crypto, and a national currency, and is a unique experiment in every sense. The intent of the country’s government behind the project is the right one given the fact that neither do they possess the resources nor the expertise to issue a national currency, and the reality that their country could go underwater in this century. Cryptocurrency seems to be the right answer. But we should not forget that this project is the first in the world and the chance of failure is high. If implemented well, this will be a huge turning point in the history of crypto, and it will serve as a sandbox experiment where the entire world can look for inspiration in the future.
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