Marshall Islands to Launch Government Owned Digital Asset Along With SOV Development Fund
Support for the usage and adoption of cryptocurrency has seen steady growth in recent times. For quite a few months now, it’s been noted that many businesses and institutions, both large and small, are making plans to accept cryptocurrency payments or at least use it to facilitate different parts of their services. Some governments have already legalized digital assets, making laws that govern them, Initial Coin Offerings (ICOs), cryptocurrency exchanges and also ensuring them some parts of these laws protect customers against fraud.
Even though there are still governments against crypto, its general goodwill and usage seems to be increasing impressively and has now spread to the Marshall Islands. According to reports, the island country, which is also a United States associate state, is making plans to create an SOV Development Fund, which is supposed to support the SOV cryptocurrency in its “journey” to displace the dollar as the official currency of the country.
A National Cryptocurrency
There are some who believe that one of the biggest problems with some major cryptocurrencies like Bitcoin is the fact that it isn’t officially supported by any government even in countries where it is recognized and legal. Japan is one of the countries quite supportive of Bitcoin and whose government officially recognizes the asset. However, it is not the country’s official currency and so no one is expected to compulsorily accept it as payment. This may not stifle its growth but it also doesn’t exactly push it forward.
For the Marshall Islands, an officially recognized cryptocurrency not only means that citizens and businesses can accept it as payments but also that international institutions that have interests in the island country would now have to regard the asset in the same way that they would any other fiat officially accepted. Even though the SOV is now being pushed as a national cryptocurrency, the U.S. Dollar will be unaffected and can still be used by any individuals or institutions that choose to do so.
Will It Catch On?
The Marshall Islands contracted SFB Technologies to create the SOV which runs on its own blockchain. The firm now has the Herculean task of trying to make sure the asset becomes popular enough for people to start using it widely. This might prove a bit difficult because currently, there is no real need for anyone to use the SOV especially as the U.S. Dollar is still very much accepted. The job might even be harder considering that the SOV was one of the major reasons the Islands’ President Hilda Heine had a vote of no confidence motion passed against her last year.
The SOV Fund and the UN Could Help
The SOV fund has optimistic goals for the asset as it hopes to help “transition to an alternative governance model based on blockchain.” Their chance of real influence is quite reasonable because the fund includes names like former President of the Ford Foundation, Luis Ubinas. It will also include seven directors some of whom will be chosen by the government.
This effort has now reached the UN at the organization’s Blockchain for Impact Summit where it was expounded that the fund will not only fully support and manage the SOV but will also help to sponsor other worthy causes that will help some issues currently biting on the country including corruption and economic deficiency.
According to Peter Dittus, the Chief Economist for the SOV project:
“The SOV Development Fund’s mandate is to maintain the SOV infrastructure long term; to seed the ecosystem around the SOV; to promote the SOV and its uses, both domestically and internationally.”
Initial SOV Distribution
Currently, it is unclear how many tokens will be created but 10% of the entire number will be available for investors who are willing to help kick off the token. Furthermore, 30% will remain with the development fund and 10% will be publicly available to the citizens of the islands once the SOV mainnet is officially released.
SOV Will Grow The Economy
The creator of the SOV Chain has said he hopes that the creation of the token would help create a “special economic zone” which will ultimately draw more funds for the country and the crypto ecosystem. Barak Ben-Ezer explained:
“The more the special economic zone grows, the more the SOV will grow. The more the SOV grows, the more funds we will have in the special development fund to support the ecosystem.”
Ben-Ezer added that the creation of new tokens and blockchains would help pull in the rest of the financial markets. He said that it might be unrealistic to expect the United States to officially recognize Bitcoin and other altcoins as official national currencies.
He further explained that it might also be impractical for Bitcoin to truly become a widely accepted currency because its supply is considerably limited meaning that the value would end up being too high. This, according to him, is why the fund might make the token open-source so that other countries would be able to fork it.