While there is talk about governments adopting cryptos as legal tender, the world isn’t quite ready for it. That is the message that the International Monetary Fund (IMF) is giving to the Republic of the Marshall Islands (RMI) over its recent decision to make its own cryptocurrency a legal form of tender. The IMF stressed that there are not enough anti-money laundering (AML), counter financing of terrorism (CFT), and know your customer (KYC) checks in place to prevent it from being exploited by nefarious individuals or groups.
RMI uses the US Dollar as its official currency, and the IMF has warned that if it does go ahead and implement cryptocurrency as a legal second tender then it could well lose its ability to use USD.
RMI to Launch Own Crypto Via ICO
The RMI had previously announced plans to launch its own cryptocurrency – dubbed the Sovereign – via an ICO. Sovereigns would be able to be purchased using USD and the cryptocurrency was designed to be another step towards gaining its independence from the United States. However, it appears as if the IMF and American government dislikes the country’s plans and is looking to scuttle the ship as fast as possible.
IMF Playing Devil’s Advocate
The IMF warned the RMI that the financial gains of implementing and using its own cryptocurrency would be negligible due to the cost to implement proper KYC, CFT, and AML controls. The IMF also highlights that the country relies heavily on foreign aid, and by financially cutting itself off from the rest of the world would not help in future aid missions to the nation.
Other Nations Creating Their Own Cryptos
A number of nations from around the globe are also exploring the possibilities of creating their own cryptos – mostly to circumvent US sanctions. Venezuela was the first to do so and it created its oil-pegged Petro earlier this year. However, the Petro is vastly underutilized by the Venezuelan public, who seem to prefer DASH and BTC. Iran is close to launching its own crypto after the US imposed a number of sanctions upon the country in a bid to denuclearize it. However, citizens ended up losing their own personal crypto funds, as crypto exchanges froze their accounts.
While a number of countries are looking to implement their own cryptos, it is still seen as too early by the international communities. There are still not enough regulations in place from governments regarding crypto taxes and how crimes committed using them will be handled. As more regulations roll out around the globe we will see more countries adopting cryptos, but for now it is clearly too early.