Marshall Islands Government Votes to Move Forward With Plan for State Cryptocurrency

The Republic of the Marshall Islands will move forward with its plan to introduce its own cryptocurrency, despite a vote of no confidence against President Hilda Heine's support of the venture, according to reports on Tuesday.

The Marshall Islands' plan for a national cryptocurrency just survived a crucial vote https://t.

The Pacific Island nation intends to introduce a cryptocurrency called the Sovereign, to be used as a form of legal tender alongside the U.S. dollar, according to the Independent.

The plan led eight senators of the Marshallese government to accuse President Heine of damaging their country's image by advocating for the cryptocurrency and called for a vote of no confidence against her.

The publication added that concerns over the plan being backed by China motivated the vote against Heine, as support from the Chinese government may be interpreted as undermining Marshallese authority.

The government aims to take the ICO route to fund the new currency, pursuing half the money necessary to get it off the ground from foreign investors.

Once the goal is reached, the remainder will reportedly either be kept in a government trust or distributed to the country's citizens.

Despite the potential risks of issuing the SOV, which include the loss of the Marshall Islands' correspondent banking relationship with the dollar according to the IMF, the Marshallese government does appear to be taking the correct steps to deal with such liabilities.

Israeli startup Neema reportedly convinced the Marshallese government it could profit from introducing its own cryptocurrency, spurring the SOV's development.

The IMF's report states that the issuance of the SOV is likely still a few years away, as it must first comply with Financial Action Task Force regulations and the U.S. government must also approve the SOV's use in transactions within the U.S. financial system.