Sovereign Currency Act of 2018

Sovereign Currency Act of 2018 is a statute of the Legislature of the Marshall Islands which was passed on February 26, 2018. The Act creates and issues a digital decentralized currency (“cryptocurrency”) that will be used as a legal tender of the Republic of the Marshall Islands (RMI).[1]

Symbol for the SOV.

Sovereign Currency Act of 2018

The Sovereign Currency Act of 2018 creates and issues the Sovereign (SOV) its own cryptocurrency.[2] This would lower the dependence on the USD.[3] There are plans for a portion of the cryptocurrency's revenue to go towards radiation-related health care needs following nuclear tests from 1946 to 1958.

Implementation

The Sovereign cryptocurrency was created through a partnership with Neema, a financial technology startup.[2] Neema will use “Yokwe” protocol to ensure anonymity while also linking each account with a verified government identity that is both encrypted and private.[4] The SOV will be issued by the Ministry of Finance and introduced through an initial coin offering (ICO) at a date yet to be announced. The number of SOV’s in circulation will start at 24 million and will grow by 4% each year.[5] RMI President Hilda C. Heine called the creation of SOV “another step of manifesting our national liberty.” [6]

Response

In September 2018, the International Monetary Fund (IMF) released a report warning the RMI not to launch its own cryptocurrency, the Sovereign, with primary concerns with cryptocurrency being a second form of legal tender, that the revenue from the ICO would be smaller than expected, and that proper governance on the cryptocurrency were not adequate.[7]

See also

References
  1. Ejukaan, Jepilpilin Ke (26 Feb 2018). "Declaration and Issuance of the Digital Sovereign Act 2018" (PDF). Nitijela: The Parliament of the Republic of the Marshall Islands. Retrieved 29 September 2018.
  2. Chavez-Dreyfuss, Gertrude (28 Feb 2018). "Marshall Islands to issue own sovereign cryptocurrency". Reuters. Retrieved 29 September 2018.
  3. Keane, Jonathan (23 Apr 2018). "Inside the Marshall Islands' plans to launch its own legal tender cryptocurrency". The Next Web. Retrieved 29 September 2018.
  4. "Marshall Islands to issue legal cryptocurrency "Sovereign"". EconoTimes. 6 Mar 2018. Retrieved 29 September 2018.
  5. "crypto that is real money". Sov. Retrieved 29 September 2018.
  6. "How the Marshall Islands envisions its national digital currency dubbed 'sovereign'". Pasifika Rising. 2019-02-18. Retrieved 2021-11-08.
  7. "Republic of the Marshall Islands: 2018 Article IV Consultation - Press Release; Staff Report; And Statement by the Executive Director for Republic of the Marshall Islands". International Monetary Fund. 18/270. Sep 2018. Retrieved 29 September 2018.


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