Why The Marshall Islands is Tokenizing Its Money

Third, based on the SOV’s issuance through an ICO as a way of raising revenue can be considered a securities offering. As there is no securities regulation governing either the pre-sale or the actual issuance, the RMI exposes itself to a regulatory vacuum unable to thwart or respond to potential fraud and manipulation. Second, SFB technologies is foreign start-up with limited financial sector experience. The company’s intention was to seek financial support from potential investors to finalize the design of the SOV highlighting the immaturity of their technical concept. Also, SFB technologies’ dual role of issuer and private investor may create the appearance of SOV is a digital currency a conflict of interest.

It has been chosen to host the Marshall Islands’ CBDC and announced that 16 other CBDC projects were in the works a few months ago. It is easy to get blinded by the promise of enormous revenue from a state-backed crypto-asset like the SOV especially considering impending revenue fallouts. The government conducted a comprehensive due diligence study on the SOV based on which the Parliament is considering repeal of the 2018 SOV Act.

Increasing regulation

• As Algorand continues to grow and attract more projects, it will undoubtedly play a significant role in the future of digital currencies and blockchain technology.
• On 11 April 2018, the US ambassador sent the Marshall Islands government a letter expressing US concerns about the abuse of the SOV for money laundering and terrorist financing, and warned that the islands could be cut off from the world financial system entirely.
• The only infrastructure needed for a blockchain-based digital currency is the network itself.
• I do not hold a position in any crypto asset or cryptocurrency or blockchain company.
• “And they are spending lots of money, both ways, to children who are studying abroad and to the people who are working,” Dr. Dittus told Decrypt.
• The Marshall Islands is partnering with Israeli company Neema to launch the SOV.

New SOV will be automatically distributed to the currency holders and the decentralized entities securing the network. This means that we in government cannot modify the money supply, and we cannot manipulate the value of our currency by printing more money. The Marshall Islands are making a bold step in embracing cryptocurrencies as their national money.

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Every individual using SOV must be identified by an approved verifier of their choice, such as a bank or an exchange. This will close the secrecy and anonymity loopholes exploited by criminals and terrorists. However, it is crucial that individual users should have a reasonable expectation of privacy — specifically, the ability to choose when to disclose your information, what exactly to share, and with whom. Toju Ometoruwa is a Northeastern University alumni who is the co-founder of Pazima, a start-up that provides secure lending options for low-income workers. His passion is to empower communities across the African diaspora through the blockchain.

Second, that the growth of our money supply would be predetermined and tamper proof. And, last but not least, that compliance would be baked into the currency protocol itself, while maintaining privacy for individuals. Neema now plans to help the Marshall Islands start fundraising by launching an Initial monetary offering (IMO) where for the first time, a sovereign nation is issuing its own currency to the public without any central bank.

As the first blockchain-based legal tender to comply with Know Your Customer (KYC) and Anti Money Laundering (AML) regulation, SOV has the properties to become a global digital currency. As such, it can be used as a low-cost worldwide preferred currency for money transactions for e-commerce as well as for p2p remittance, including for the unbanked, cutting the high commissions paid today. At present, India neither prohibits nor allows investment in the cryptocurrency market.