The US dollar has been the official legal tender of The Marshall Islands, a remote archipelago in the Pacific, since its adoption in 1982. However, that is no longer the case; now the nation’s own cryptocurrency, the Sovereign, will its official tender.
The bill making the change official was signed into law on March 1 but has yet to go into effect. The change impacts the 53,066 residents of the island nation as well as the numerous companies who are located there or do business there. While the nation will likely continue to accept US dollars, at least for a while, the push towards using the Sovereign is expected to be strong.
Before the change goes into effect, the nation still needs to host its initial coin offering. It is expected that the currency will be capped at 24 million tokens to prevent inflation. However, the country has yet to set a date for its ICO. The country estimates that the coin will be in use in the third quarter of 2018.
The cryptocurrency was designed by Israeli fintech company Neema.
The Marshall Islands is not the first country to create its own cryptocurrency; Venezuela did the same earlier this year with the creation of the Preto. However, it is the first United Nations member to do so, which means the currency will have a greater effect on other countries and international banking. While reaction to the Preto has been mostly negative given the sanctions against Venezuela, it is unclear how other nations are reacting to the Sovereign.