Crypto enthusiasts and citizens from the Marshall Islands have a reason to celebrate this weekend – Hilda Heine survived a vote of no-confidence. A group of senators decided to take action against the president after she ignored warnings from the International Monetary Fund (IMF) and pushed ahead in creating a national cryptocurrency. The Marshall Islands currently uses the US Dollar under a special arrangement, and the IMF has warned that the US will withdraw this privilege should it create its own national cryptocurrency.
The Sovereign Pushes Ahead
In March, the government teamed up with an Israeli firm to issue 24 million sovereigns – the name of the Marshall Islands national cryptocurrency – in a bid to raise funds to help the country survive and thrive on its own. Some of the funds will be distributed to those affected by US nuclear testing that happened on the islands – leaving large swathes of land uninhabitable due to radiation. Other uses for the money raised will be used towards protecting against climate change and coastal erosion, as well as the development of local infrastructure. Now Heine has survived the vote, she can push ahead and resume the launch plans.
Many Uses for the Sovereign
Heine and her government will allow citizens to pay their taxes, buy groceries, top up fuel, and much more with the Sovereign once it launches. It’s thought that there will be discounts available on all products – including tax breaks – for those using the Sovereign as an incentive to help people transition away from the US dollar.
A More Honest Use for a Crypto Than the Petro
Many critics are calling the Sovereign an elaborate plan to dodge international sanctions, but the Marshall Islands is yet to have any imposed upon it. Other circles are comparing the Sovereign to the Petro – the government-backed cryptocurrency from Venezuela. However, the Petro is very clearly a giant scam orchestrated by the government in a bid to get its hands on USD that simply isn’t working. There are no use cases on the ground in Venezuela and citizens are turning to the Petro – so anyone comparing the two is simply talking smack.
Christine Lagarde Says Don’t Ignore Cryptos
The head of the IMF has said that people should ignore cryptos at their own peril. In an article in this month’s bulletin, Lagarde went on to compare cryptos to the invention of the telephone, implying that anyone who laughs at cryptos and says they have no future will get burnt later on. Given the fact that her agency is trying to dissuade the Marshall Islands from creating its own crypto, it looks as if the US and the IMF are afraid the Marshall Islands will become totally free and not fall under their rule anymore.
This is a momentous moment for the crypto community, as we could see the first legitimate government use of cryptocurrencies in the world. If Heine is successful in creating the sovereign, we could see a number of governments follow suit and a new world whereby cryptos are accepted everywhere unfold.