A group of Marshal Island’s senators have introduced a vote of no confidence in president Hilda Heine over her administration’s plans to unveil a government backed cryptocurrency.
New token- SOV
President Heine’s administration has developed a digital a national crypto dubbed sovereign (SOV) that will be used alongside the US dollar, which is the nation’s official legal tender up until now.
The new crypto will be unveiled through ICOs but only to a tune of $24 million worth of tokens. The limit is precautionary to avoid flooding the market with digital assets that would in turn cause inflation.
The plans to roll out the country’s second offical legal tender was also backed by the republic’s parliament. Speaking about the government plan’s David Paul, The minister-in-assistance to the president said that “As a country, we reserve the right to issue a currency in whatever form it is, whether in digital or fiat form.”
The move to adopt digital assets as the nation’s official legal tender has elicited a lot of crytisism not only from the outspoken senators but also the nation’s former president Casten Nemra. Nemra is concerned that the move would puncture the nation’s reputation severely considering that they are already facing santions by the EU and the US.
The US Treasury Department has already adviced the nation against moving forward with its plan until it has established adequate regulations to govern the crypto. This is an obvious concern as the cryptocurrency industry is one of the poorly regulated financial sector with fraudsters and hackers ripping off investors every now and then.
Another notable body that sees Marshal Island’s plans as insane is the International Monetary Fund (IMF). The IMF has advised the Island’s authorities to seriously reconsider its plans warning that it may come with undesirable economic implications.
The republic with a tiny poulation of about 53,000 is going the Venezuela-way to save its economy from nosediving further. It is however, important to point out that Venezuela’s efforts to launch Petro as the nations official legal tender has not yielded any significant results so far.