The Marshall Islands were formed in 1982, and they've been operating with U.S. currency ever since. In a move that is virtually certain to embolden proponents of digital currency worldwide, the Marshall Islands have now taken the unprecedented action of selecting cryptocurrency as their second federally recognized form of legal tender. In other words, the tiny nation's government will provide backing for what they've dubbed "Sovereign."
Launching a new cryptocurrency requires a lot of cash. To that end, the Marshall Islands government has joined forces with Israeli startup Neema. When SOV officially launches, there will be 24 million of these crypto coins issued. Half will go to Neema, with the Marshall Islands retaining control over the other half. Next, the nation plans to approach international investors with the opportunity to purchase 6 million SOVs.
Time.com's Money reported that the proceeds from selling half the country's initial offering of SOVs will be used for several programs. The top three priorities are combating the damage caused by global climate change, paying for the nation's budget, and offering additional assistance to the victims of U.S. nuclear tests.
Per The Telegraph, Cambodia has taken inspiration from Venezuela's plans and maybe the next nation to do something similar. With the Marshall Islands taking things in a much bolder direction, it's possible that the leaders of Venezuela and Cambodia will push to expand their respective country's support for their homegrown forms of cryptocurrency.
Some residents have expressed concerns about giving so much national digital currency to an Israeli startup. Others quite simply aren't convinced that cryptocurrency is anything more than just a fad. Either way, the Marshall Islands is about to become a test case for every other country that's interested in launching a national cryptocurrency.