Trying to build a decentralized path to independence, the Marshall Islands have made the decision to issue their own digital currency based on the Blockchain, the Marshallese sovereign (SOV).
The Marshall Islands is an island nation and an associated state of the United States, which has used the US dollar as the official currency since it gained independence as a democratic country in 1979.
The point is that it has been estimated that the dependence of the state on subsidies of the United States amounts to around 70 million dollars every year, we can agree that it is a big problem for the nation. Therefore, the important step that the island nation is taking can be pointed out.
Through an essay published through the famous Coindesk news media written by David Paul, Minister of Assistance to the President and Environment of the Marshall Islands. In this essay, Paul focuses on three main aspects:
- First, that the currency would be based on Blockchain technology; This is vital for the Marshall Islands.
- Second, that the growth of our money supply would be predetermined and tamper-proof.
- That compliance would be incorporated into the monetary protocol itself, while maintaining people’s privacy. ”
This is how Paul continues praising Blockchain technology, exalting the ability to make transactions that are fast, simple and cheap.
The island’s authorities are convinced that centralized solutions are not viable in a country of just over 50,000 people that are spread over more than 1,000 Pacific islands. From here comes its charm in Blockchain technology.
Paul also points out that blockchain allows the State to be much more efficient, since it automates a large part of its obligations, which obviously reduces the associated costs.
On the other hand, regarding the specifications of the new sovereign digital currency, they have decided to implement a fixed money supply with a fixed growth.
“Our money supply will grow to 4% sustainable every year, following the k% rule of Milton Friedman. The new SOV will be automatically distributed to currency holders and decentralized entities that secure the network. This means we cannot modify the money supply, in the government, and we cannot manipulate the value of our currency by printing even more money ”.
In this way, Paul assured that the Marshall Islands are working hand in hand with international regulatory bodies precisely with the objective that SOV meets all the requirements and, therefore, can fit into the international financial system.