The Republic of the Marshall Islands (RMI) is moving ahead with its blockchain-based national currency, the Marshallese sovereign (SOV). The next step at the Invest: Asia cryptocurrency conference in Singapore, will be to introduce the sovereign in a highly visible way before the circulation in the Marshall Islands is initiated. Specifically, the currency will be introduced through a sale over an extended period of time in a Timed Release Monetary Issuance (TRMI). The units sold during this introductory period are intended to be exchanged for the Marshallese sovereign once it is officially launched. The TRMI units are to be released continuously in equal daily allotments via auctions.
The bulk of the proceeds will be placed in trust funds focused on key challenges for the Marshall Islands, such as combating climate change and mitigating the ongoing health crisis caused by nuclear testing at Bikini Atoll.
David Paul, Environment Minister and Minister-in-Assistance to the President of the Republic of the Marshall Islands (RMI), provided new details about SOV during a keynote speech and interview at the conference.
SOV is a government-issued digital currency built on a specially developed blockchain. It has built-in compliance features and its supply will grow at a fixed rate. The RMI currently uses the United States dollar as its currency, and the dollar will continue to circulate in the islands once SOV has launched, but the Marshallese sovereign will be the RMI’s official legal tender.
Minister Paul focused on the challenges faced by the Marshallese citizens and government, including remittance costs as high as 10% per transaction, logistical challenges due to the remoteness of the outer islands, dwindling international banking relationships and a lack of monetary policy options.
“Blockchain changes everything,” the Minister said, “Blockchain won’t just let us create our own money for the first time — the sovereign is a new kind of money, one which enshrines our Marshallese values.”
The minister said that SOV is “sustainable, fair, safe and simple.” The supply grows at a fixed 4% a year, preserving its value and removing the ability to “print money”, which the minister suggested had laid the seeds for the recent global financial crisis.
Minister Paul emphasized how SOV is more secure than standard currencies, and how it minimizes the compliance burden for small governments such as the RMI. It allows them to participate more effectively in the global fight against money laundering and the financing of terrorism.
The SOV has strong compliance features as part of its blockchain. Only verified users will be able to transact in SOV. At the same time, the minister stressed that preserving user privacy was of paramount importance.
In addition to algorithmically fixing the supply growth of SOV, newly created SOV will be sent automatically to eligible SOV holders, including all Marshallese citizens. Marshallese citizens will also receive an equal split of 10% of the initial currency supply. “This is something which no other government has done, made possible by blockchain,” the minister explained.
Interested parties can pre-register for the TRMI at the website of the SOV Development Foundation (https://sov.foundation). Visitors to the site will find more information about the Marshallese sovereign, the foundation, the Marshall Islands, as well as the newly released SOV white paper.