Sovereign Currency Act of 2018 is a
statute
A statute is a formal written enactment of a legislative authority that governs the legal entities of a city, state, or country by way of consent. Typically, statutes command or prohibit something, or declare policy. Statutes are rules made by l ...
of the
Legislature of the Marshall Islands
The Legislature of the Marshall Islands ( mh, Nitijeļā ) has 33 members, elected for a four-year term in single-seat and five multi-seat constituencies. The last election was November 18, 2019. Elections in the Marshall Islands are officially ...
which was passed on February 26, 2018. The Act creates and issues a digital decentralized currency (“
cryptocurrency
A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...
”) that will be used as a legal tender of the
Republic of the Marshall Islands
The Marshall Islands ( mh, Ṃajeḷ), officially the Republic of the Marshall Islands ( mh, Aolepān Aorōkin Ṃajeḷ),'' () is an independent island country and microstate near the Equator in the Pacific Ocean, slightly west of the Internati ...
(RMI).
Sovereign Currency Act of 2018
The Sovereign Currency Act of 2018 creates and issues the Sovereign (SOV) its own cryptocurrency.
This would lower the dependence on the
USD
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
.
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
Fintech, a portmanteau of "financial technology", refers to firms using new technology to compete with traditional financial methods in the delivery of financial services. Artificial intelligence, blockchain, cloud computing, and big data are ...
startup.
Neema will use “Yokwe” protocol to ensure anonymity while also linking each account with a verified government identity that is both encrypted and private. The SOV will be issued by the
Ministry of Finance A ministry of finance is a part of the government in most countries that is responsible for matters related to the finance.
Lists of current ministries of finance
Named "Ministry"
* Ministry of Finance (Afghanistan)
* Ministry of Finance and Eco ...
and introduced through an
initial coin offering
An initial coin offering (ICO) or initial currency offering is a type of funding using cryptocurrencies. It is often a form of crowdfunding, although a private ICO which does not seek public investment is also possible. In an ICO, a quantity of cr ...
(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. RMI President
Hilda C. Heine called the creation of SOV “another step of manifesting our national liberty.”
Response
In September 2018, the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glob ...
(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.
See also
*
Petro (cryptocurrency)
References
Economy of the Marshall Islands
Cryptocurrency projects
2018 in the Marshall Islands
2018 in economics
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