The Marshall Islands is set to become one of the first countries in the world to issue a publicly funded cryptocurrency backed by the country's government.
The small island country has never been considered an innovation hub, but it is now planning to launch the Sovereign (SOV) cryptocurrency, which will be used as legal tender for businesses and consumers. The economics of SOV are such that tokens will be limited to 24 million and will be legally backed by the government, allowing the cryptocurrency to be used as a regular currency. The SOV will be released through an ICO, available to the public later this year.
Many centralization advocates do not accept the concept of a state currency, as they oppose the government having control over cryptocurrency.
Barak Ben-Ezer, CEO of the fintech company Neema, which is helping with the project, notes that the country's government will not actually control the new currency. “The Sovereign cryptocurrency will be completely decentralized, and the government will not be able to control its circulation. After the sale, the circulation of the cryptocurrency will be carried out independently on the blockchain network.” The blockchain of the SOV cryptocurrency will not be anonymous, allowing it to operate in a regulated environment and receive government support.
A report from consulting firm Deloitte found that a government-sponsored cryptocurrency could be a valuable tool in the digital economy, but it would likely be only one piece in a larger system:
“Although a government-sponsored cryptocurrency cannot completely replace Bitcoin or any other digital currency or fiat currency, hypothetically consumers and institutions could use multiple digital wallets built around multiple currencies. Consumers will be able to choose the most appropriate currency for a given transaction with the best exchange rate.”
The SOV cryptocurrency is currently seen as an experiment in a new digital economy with many open questions. Governments of other countries are closely monitoring developments regarding Marshall Islands cryptocurrency.
According to https://cryptoinsider.21mil.com
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