Marshall Islands to Issue Digital Currency (SOV) Utilizing Algorand’s Blockchain Tech
- The Marshall Islands are about to build the first digital currency backed by state, using the Algorand protocol.
The Marshallese sovereign (SOV) will be developed by SFB Technologies. In a statement, SFB’s CTO and co-founder, Jim Wagner, said Algorand has been chosen after an extensive research, also that is scalable and secure enough to properly issue and manage the SOV.
Today, the Republic of the Marshall Islands announced the first national digital currency, the Marshallese sovereign (SOV), will be built using Algorand’s #blockchain: https://t.co/8fS6adYj2b @SOV_Foundation #digitalmoney #SOV @jpwgnr pic.twitter.com/qkiFQmxPgy
— Algorand (@Algorand) March 2, 2020
Algorand Will Create, Issue and Manage the SOV
The agreement between the Marshall Islands and Algorand is that the latter will come with the base technology for creating, issuing and managing the SOV. At the same time, it will provide technical support after the launch of the currency, all while making sure the country’s requirements are being met.
The SOV will be built on a permissioned version of the Algorand blockchain, more precisely on the co-chain, which is not public. This way, the central bank and the Marshallese government will be able to oversee the network. It will be US dollar-pegged and have its inflation algorithmically fixed at 4%.
The Marshall Islands Announced the SOV in 2018
The Marshall Islands have expressed their intention to launch a digital currency that works alongside the US dollar, the national currency in the country, ever since the beginning of 2018, when it also started working with international regulatory agencies to make sure the SOV is going to comply with regulations.
The collaboration with Algorand started a few months ago. The SOV is supposed to be issued later in 2020 and may be the first one of its kind. China and Cambodia are the only 2 other countries that may launch their own digital currencies very soon.
Algorand Hoping to Make the SOV Compatible with Other Digital Currencies
Algorand’s COO, Sean Ford, said the SOV may be made compatible with other digital currencies released by sovereign countries, in an attempt to make it part of the global ecosystem. Here are his exact words on this:
“We know central bank digital currency initiatives are only expanding, there are many different countries that are now collaborating and thinking about how they can leverage blockchain in this space.”
No comment about any partnership has been made. It may be that other sovereign currencies looking to develop their own digital currencies have already started talking with Algorand too.