In an agreement with Swiss maker of blockchain-enabled smart card wallets for cryptocurrencies, Tangem, the Marshall Islands will soon begin circulating physical bank notes, becoming the world’s first decentralized national currency.
“We are excited to partner with the Republic of the Marshall Islands to do something that has never been done before: issue a digital currency as official legal tender,” Tangem co-founder Andrey Kurennykh stated.
Per the recently published press release, Tangem will issue the banknotes so these can be used to store SOV tokens, which will be launched as an alternative legal tender to the US dollar. The physical banknotes is in the form of a smart card powered by a blockchain-enabled microprocessor.
“Tangem will help us ensure all citizens, including those living on more remote outer islands, are able to easily and practically transact using SOV,” stated David Paul, a minister-in-assistance to the Marshall Islands’ president.
Tangem’s technology allows users to store and carry crypto on a plastic card with a chip and an NFC (Near Field Communication) antenna inside. This will allow the Marshall Islands’ citizens “immediate” transaction validation, and zero-fee transactions. In addition, it won’t require an internet connection.
Kurennykh claims that the International Monetary Fund (IMF) stated the world is “moving towards the widespread adoption of digital currencies, and that the firm is “excited to support the birth of the new global digital economy.” However, CryptoGlobe reports that the IMF advised the Marshall Islands to not go forward with the introduction of the SOV, stating the issuance of a decentralized digital currency would “increase macroeconomic and financial integrity risks, and elevate the risk of losing the last U.S. dollar correspondent banking relationship.”
Despite the IMF’s advice, the country is seemingly moving forward. It hired Steve Tendon, head of blockchain consultancy firm ChainStrategies, earlier this month as its cryptocurrency advisor.
According to Paul, the island has the right to roll out a national currency, a move to further reduce its dependence on the U.S. dollar. “As a country, we reserve the right to issue a currency in whatever form it is, whether in digital or fiat form,” he said.