Cryptocurrency now Legally Tender in the Marshall Islands

The Marshall Islands, until now, has been known for its shipping industry. It is a remote archipelago with a population of 53,000 people. It is now on its way to introduce a proprietary digital currency. If everything goes as planned, the sovereign currency or SOV will be used in tandem with local physical currency.

Legal tender

The present local currency is the United States dollar. The US currency became legal tender in the island from 1982. The difference between the Marshall Islands cryptocurrency and other similar technology digital currencies is that the currency will be a legal tender both for businesses and also for citizens residing on the island. If successful, Marshall Islands would have pulled off the first experiment in the world relating to digital payments and their viability. The blockchain technology will underpin efforts and with time may play a crucial role in the economy.

The cryptocurrency concept was the idea of  Barak Ben-Ezer, the Chief Executive Officer of Neema, a financial technology company headquartered in Israel. He did not target the Marshall Islands only to adopt the Blockchain system. Ben-Ezer discussed the concept with a number of countries but only the Marshall Island showed interest. A few analysts interpret the island country's acceptance as a desire to remove its once reputation as a center for laundering money. The administration of the Marshall Islands wants to promote a traceable and progressive system for daily transactions and payments.

Co-existence

The government of Marshall Islands gave its full backing to the cryptocurrency scheme. When launched, both currencies, the US Dollar, and the SOV will co-exist. The government has said that it has no plans to remove the American dollar as legal tender from the Marshall Islands' monetary system. When it comes to cryptocurrencies, Marshall Islands is not alone. Venezuela has set up the petro. It is a fully tradeable cryptocurrency created to sidestep sanctions imposed by the United States on Venezuela.

In matters of dependability, David Paul, the minister helping the Marshall Islands' president, assured of its permanence and it being impervious to money laundering schemes. He said the SOV is designed especially to be completely unusable for such transactions. This is as unlike the standard fiat currencies, transactions executed on cryptocurrency gets recorded on the blockchain. This is a ledger whose special coding makes it extremely secure. The users of cryptocurrency are divided between those who appreciate the security of these currencies and those who like the built-in anonymity for helping criminal behavior.

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