Just in case you missed it. In February 2018, the small Republic of Marshall Islands, an island country located near the equator in the Pacific Ocean with some 60,000 people, passed the Sovereign Currency Act, which made it the first country to issue their own cryptocurrency and certify it as legal tender. The project was friendly supported by the U.S. and Israel. It seems to be a sort of a pilot project for cryptocurrency as legal tender.
The new cryptocurrency called Sovereign (SOV) will replace the US dollar as the republic’s currency. The Marshall Islands is a United Nations member and a sovereign state, hence this will create a larger impact for banks globally.
This cryptocurrency, called the Sovereign (SOV), was created through a partnership with Neema, an Israeli financial technology startup. Neema’s Israeli law firm Yigal Arnon & Co. even helped with the drafting of the needed legislation. Attorney Yuval Shalhevet said: “The Marshall Islands central bank was involved in the process, but since they do not have a currency (they use the USD), the Marshall Islands rulers never dealt with monetary regulation. They did not really have currency laws, we helped write the law.” We found excellent background story on the project here on Bitcoin.com or here on Haaretz.
The SOV will be issued by the RMI’s 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.
“This is a historic moment for our people, finally issuing and using our own currency, alongside the USD (U.S. dollar),” President Hilda Heine said in a statement. “It is another step of manifesting our national liberty.”
The Marshall Islands is closely aligned with the United States under a Compact of Free Association and currently uses the US dollar as its currency. The Americans run a military base on Kwajalein Atoll.
The decisive question now is what this will mean for regulators in different jurisdictional regimes. We will experience it over the next couple of months.