Algorand Blockchain Chosen as Underlying Tech for Marshall Islands' Digital Currency

Published on by Coindesk | Published on

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The Marshallese sovereign, which could become the first state-backed digital currency to enter circulation, will be built using the Algorand protocol.

SFB Technologies, the technology provider tasked with delivering the SOV initiative, announced Monday it had selected the Algorand protocol as the blockchain base for the upcoming digital currency of the Marshall Islands.

"One of the strengths of the Algorand protocol is the speed at which we operate, with transactions not just happening quickly but also with absolute finality," explained Algorand Chief Operating Officer Sean Ford to CoinDesk, adding the core chain was easy to use and could scale dynamically to handle fluctuating volumes.

Per its agreement to build the Marshallese SOV, Algorand will provide base technology for the creation, issuance and ongoing management of the digital currency.

The SOV won't be built on the public Algorand blockchain but a permissioned version, known as a "Co-chain," that will give the Marshallese government and central bank greater oversight of the network.

The digital currency will be pegged to the U.S. dollar - the country's official currency - and will algorithmically fix its inflation at 4 percent.

The Marshall Islands first stated its intention to launch a digital currency back at the beginning of 2018 to work alongside the U.S. dollar.

He said: "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."

Ford wouldn't confirm if Algorand had either partnered, or was looking at partnering, with other countries to help them develop their own sovereign digital currencies.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.