Marshall Islands to adopt SOV as state cryptocurrency

The Marshall Islands is aiming to release a state digital currency this year.

The exact launch date of the currency, known as the ‘Sovereign’ (SOV), is not yet known.

It was developed in partnership with Israeli firm Neema.

Barak Ben Ezer, chief executive officer of Neema, told the Times of Israel: “We plan to launch SOV this year.

“We are working days and nights to prepare the foundations of the SOV initial coin offering, with the goal of being ready to launch once positive momentum is back to the markets.

“It will be done once all stakeholders are convinced that SOV is ready, risks have been mitigated, and momentum is building.”

United States financial regulators have expressed concern about the move.

US concerns

“The US Treasury has concerns about anonymous digital currencies, such as Bitcoin, [which] are often used for illicit purposes by people who want to conceal their identity,” Ben Ezer added.

In November, the SOV survived a crucial vote forced by island leaders hell-bent on derailing the project.

President Hilda Heine – President of the Republic of the Marshall Islands – faced a vote of no confidence from the island chain’s senators who claimed the idea involved too many financial risks.

The independent Micronesian nation has strong historical and economic ties with the US, and uses the US dollar as currency.

Several political leaders of the islands fear the SOV could erode those relations and, indeed, use of the dollar.

A detailed report by the International Monetary Fund (IMF) urged for caution, stating there were several risks involved.

“The Marshallese authorities are well aware that issuing a legal tender cryptocurrency puts RMI into uncharted waters, and that there are many risks involved in issuing the SOV,” it said.

“However, they believe they can work through these issues.”