First national digital currency about to reach another milestone
By Dr. Peter Dittus, board member of the SOV Development Foundation and Chief Economist at SFB Technologies
22 November 2019
Sustainable, safe and simple — the Marshallese Sovereign heralds a new era for the Pacific island nation
Early last year, the Republic of the Marshall Islands announced its plan to introduce a blockchain-based currency, the Sovereign or SOV.
Fast forward a couple of months and the Timed Release Monetary Issuance (TRMI), the pre-sale for the SOV, is just around the corner, with the exact date to be revealed in the next couple of weeks. The TRMI gives users the opportunity to buy TRMI units that can later be exchanged for SOV units on a one-for-one basis.
There’s more to the SOV than meets the eye
The launch of the Sovereign is exciting for several reasons. The most obvious one: the SOV is the first legal tender digital currency in the world. Unlike other digital currencies, such as Bitcoin and Libra, the Sovereign is issued, controlled and regulated by the Marshallese government. Just like the pound in the UK or the dollar in the US, the SOV will be the official means of payment in the Marshall Islands alongside the US dollar.
Apart from that, the SOV is able to compete with conventional currencies in multiple ways. First of all, it’s fair. Anyone can use it, and new units are distributed equally among all SOV holders.
It’s also worth noting that every SOV user undergoes private compliance checks with a registered verifier, making the currency a safe means of payment. In addition to that, both individuals and the public sector benefit from the SOV: the currency is not only easy to use but also easy to secure and regulate.
Hyperinflation will be a thing of the past
What makes the SOV really stand out over conventional currencies, however, is its sustainability. The supply of the Sovereign increases slowly and steadily at a fixed rate of 4 percent annually, which helps to prevent an extraordinarily high and accelerating inflation (runaway inflation). The following graphic gives more details.
The SOV Development Foundation, which is responsible for the distribution and development of the Sovereign, will make sure that the bulk of the proceeds goes into funds that are focused on tackling key challenges for the Marshall Islands. These include the ongoing health crisis caused by US nuclear tests in the ’40s and ’50s as well as climate change issues such as rising sea levels.
At the end of the day, the Sovereign is more than just a currency. It will add value to the entire Marshallese community and pave the way for a safe, fair and sustainable payment system.
Published at Fri, 22 Nov 2019 21:11:02 +0000
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