Marshal Island approved for the development of the national digital currency. Sovereign (SOV), almost a year back in order to tackle increasing remittance costs and provide faster transactions. The white paper of the digital SOV bears a lot of design resemblance to Block One’s EOS.
The development of digital SOV blockchain infrastructure was assigned to SFB Technologies.
Jim Wagner, co-founder, and CTO of the firm confirmed that digital SOV was indeed inspired by Block.One and EOS. He clarified that although the blockchain for the national digital Fiat will be completely independent. He also declined to provide any data or stats on the blockchain regarding how fast it would be or what would be its transaction per second processing speed.
The Marshall Islands is preparing to launch a Timed Release Monetary Issuance (TRMI) system on which the digital SOV will be released gradually to the public. Wagner said,
“The Marshall Islands is preparing to launch the Timed Release Monetary Issuance (TRMI) in order to introduce the SOV in a gradual manner. The Pre-SOV is a right to receive an SOV unit once the SOV is issued.”
The Digital SOV Design
Each unit of digital SOV will be equivalent to 100 Sovis and each Sovi is equal to a cent, which means each SOV is equivalent to 100 cents. However, Sovi is not the smallest unit as it can be divided up into 4 decimal places, which makes it highly efficient for microtransactions.
The aim behind creating a national digital currency was not from an efficiency point of view, as it also helped the Marshall Islands to create an alternative national currency to US Dollars which they have been using for 40 years. The island group has been administered by the US under the Trust Territory of the Pacific islands.
David Paul, Minister In-Assistance to the President and Environment of the RMI, revealed that the country decided to issue a decentralized legal tender because the centralized solution is not efficient in a country with a population of around 50,000. Paul also noted that the national currency will be totally decentralized and tamper-proof with a fixed supply with a fixed growth rate of 4% per year. He explained,
“We chose to create a fixed money supply with fixed growth because fiat currencies can be remarkably unstable. […] The policies of major central banks are not reassuring, as the gold and bitcoin prices attest. We as governments need to take a more sustainable approach to money, and not treat it as a limitless resource.”
The Republic of Marshall Islands was also warned by the International Monetary Fund (IMF) against using cryptocurrency as a legal tender suggesting it would pose a risk to the country’s financial sovereignty and its relation with international banks.