Sovereign Currency Act of 2018 is a statute of the Legislature of the Marshall Islands which was passed on February 26, 2018. The Act creates and issues a digital decentralized currency (“cryptocurrency”) that will be used as a legal tender of the Republic of the Marshall Islands (RMI).[1]
The Sovereign Currency Act of 2018 creates and issues the Sovereign (SOV) its own cryptocurrency.[2] This would lower the dependence on the USD.[3] There are plans for a portion of the cryptocurrency's revenue to go towards radiation-related health care needs following nuclear tests from 1946 to 1958.[citation needed]
The Sovereign cryptocurrency was created through a partnership with Neema, a financial technology startup.[2] Neema will use “Yokwe” protocol to ensure anonymity while also linking each account with a verified government identity that is both encrypted and private.[4] The SOV will be issued by the Ministry of Finance and introduced through an initial coin offering (ICO) at a date yet to be announced. The number of SOV’s in circulation will start at 24 million and will grow by 4% each year.[5] RMI President Hilda C. Heine called the creation of SOV “another step of manifesting our national liberty.” [6]
In September 2018, the International Monetary Fund (IMF) released a report warning the RMI not to launch its own cryptocurrency, the Sovereign, with primary concerns with cryptocurrency being a second form of legal tender, that the revenue from the ICO would be smaller than expected, and that proper governance on the cryptocurrency were not adequate.[7]
