Marshall Islands launches national cryptocurrency

The Republic of the Marshall Islands launches its own national cryptocurrency in order to gain independence of monetary policy from the US dollar.

The Marshall Islands received limited autonomy in 1979, and the Free Association Agreement was signed in 1986, according to which the United States recognized the independence of the Republic. Until that time, the state used the US dollar as the official currency. In 2018, authorities adopted the Law on Sovereign Currency, which describes a plan to launch a national digital currency.

Assistant to the President of the Marshall Islands, David Paul (David Paul) noted that in the decision-making process, the authorities relied on several factors. First, they are convinced that centralized solutions are not applicable in a country with a population of just over 50,000 people scattered across numerous islands in the Pacific Ocean.

“The issue of the national currency is the prerogative of any sovereign nation, but we decided to go further and use blockchain technology,” he says. “Our new national currency will be used in parallel with the dollar.”

He attributed the advantages of such a currency to the possibility of setting legal standards at the protocol level while simultaneously “maintaining the privacy of private individuals”. Banks and exchanges approved by the authorities will be engaged in identifying users of digital currencies, which will make it possible to exclude the possibility of anonymous use, but at the same time they will not refuse to protect personal financial information.

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“Users must adjust their privacy levels by selecting the information they’d like to disclose,” Paul writes.

He also noted that the national digital currency of the Marshall Islands will have limited emissions, and its inflation will be 4% per year.

“Fiat currencies are known for their volatility. We decided to go the other way and set a limited emission and a fixed growth rate. The policies of today’s largest central banks do not inspire confidence, as evidenced by quotations of assets such as gold and bitcoin. As a government, we must take a more consistent approach and not perceive money as an unlimited resource, ”Paul also wrote.

As another indirect advantage, the presidential aide noted that the issuance of fiat currencies is quite expensive, and ordinary citizens pay for it. Creating a currency on the blockchain is devoid of these shortcomings.