Marshall Islands establishes special fund to develop national cryptocurrency

The Republic of the Marshall Islands (RMI) has established a non-profit organization to support the government in developing the country's national cryptocurrency.

According to Cointelegraph, the Marshall Islands has established the SOV Development Fund to support the government's plan to develop and implement its national cryptocurrency Sovereign (SOV). The fund will be completely independent, with a board of seven directors, two appointed by the government, two nominated by software developer SFB Technologies, the company developing the blockchain infrastructure for SOV. The remaining three directors will be selected unanimously by the four international experts in blockchain technology, banking, and monetary policy mentioned above.

In a video presentation at the Blockchain for Impact Summit at the United Nations headquarters in New York, Marshall Islands Assistant to the President and Minister of Trade David Paul stated:

We are working on designing the SOV, and it will not burden the government financially, as the development fund will support it independently.

SOV Chief Economist Peter Dittus further explained:

The mission of the SOV Development Fund is to nurture the ecosystem around SOV and reduce its volatility against the US dollar through the sale and purchase of SOV, which will be one of the primary goals.

According to Dittus, the decision to develop a national cryptocurrency in developing countries like the Marshall Islands is driven by several reasons. Developing countries, such as the Marshall Islands, struggle with high remittance costs, and the development of a legitimate cryptocurrency could provide a solution, essentially "embedding" a solution to high-cost remittances into the fiat system itself.

It is understood that the implementation of cryptocurrency policies in the Marshall Islands has faced criticism from the International Monetary Fund (IMF) since September last year, warning the country of the risks of using cryptocurrency as a second legal tender and urging the country to abandon the project. In response, the Israeli digital banking platform Neema (also involved in the development of SOV) stated in March this year that the project still requires more communication with US financial regulators.

As previously reported in "Bank Remittance Fees as High as 9.4% Africa Slowly Embracing the Crypto Market," in fact, Africa and many other developing countries have had to endure high costs for remittances and receipts. A World Bank report pointed out that in the first quarter of 2018, the average remittance cost for $200 globally was about 7.1%, approximately $14.2. This is more than twice the targeted cost of 3%. For countries with scarce financial services, cryptocurrencies seem to be a long-awaited savior.

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