Interesting developments from the Marshall Islands indicate that the country is set to launch its own independently monitored cryptocurrency system that will be used across the country. The Fiat based crypto will be governed by consensus together with a board of seven people, three of whom will be elected by the previous four chosen.
According to a press release, the SOV Development fund will establish this newly launched fiat crypto
The Fund’s mandate is to support the government in the establishment, maintenance and implementation of the SOV, the Marshall Islands’ digital legal tender.”
This move is quite thought provoking if you think about it, because the way monetary systems operate today, the launch of a central bank backed fiat token would completely eliminate the need for cash. The banking industry would quite possibly collapse since the people will easily be able to carry around any amount of fiat tokens on their person instead of depositing their money in bank accounts. Bank ATMs would disappear quite rapidly as well, because people will easily be able to transact using the fiat tokens without needing to withdraw from an ATM.
This system wouldn’t be entirely new though since we already have mobile payments solutions where transactions are done digitally without the need to carry around cash. The difference would be the use of our smartphones for practically every activity that involves payments since cash will be wiped out.
The Marshall Islands has a population of only about 50,000 people which makes the island nation a great place for such an experiment. It will be interesting to see how the tourism sector in the country will react to the move because obviously, visitors will be expected to buy crypto tokens on entry and spend them locally; which is probably how the token will find and retain its value. The elimination of the banking system has startled many, but a lot of commentators believe that the crypto can thrive whether or not it replaces the banking system.
The idea of governments launching their own crypto currencies has excited crypto enthusiasts in different countries, since it means the ability to control and store your tokens with government backing. The danger here though is posed by the fact that government backing is only as good as the government in power; regimes change, and stances could change as well.
The move by the Marshall Islands is quite interesting though because it stands out. The tiny island nation may not be the first to have a go at launching a country fiat token, given that Iran and Venezuela have attempted to do it inorder to avoid economic sanctions; but it is the first to launch a national token just for the purposes of staying ahead of the curve.
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