Marshall Islands rejects President's plans for national cryptocurrency

06 Nov, 2018
by David Robb
Marshall Islands rejects President's plans for national cryptocurrency

The President of the Marshall Islands is due to face a vote of no confidence from her parliament on November 12, as reported by Radio NZ. Among a number of criticisms from senators was the suggestion that she had damaged the country's reputation with her plans for a national digital currency.

The no confidence motion was introduced by eight senators against President Hilda Heine, who is the first and only female head of state of an independent Pacific island. Before the vote next Monday, the issues affecting the decision will be debated in the Marshall Islands' parliament, which is currently evenly split between supporters and opponents of Heine.

One of the most contentious issues was the President's announcement in February of plans to introduce a new national digital currency, serving as legal tender alongside the US Dollar. The country has faced severe economic instability recently, and is increasingly reliant on foreign aid after a series of national disasters. Much like Venezuela's controversial Petro digital token, the new crypto was intended to increase the Marshall Islands' financial independence, and would be known as the Sovereign.

Read more: IMF warns the Marshall Islands against launching its own cryptocurrencyVenezuela launches public sale of new national crypto, the Petro

The plans for a national cryptocurrency were criticized by the IMF, as well as the US Treasury Department. It was claimed that the Israeli start-up due to develop the crypto had insufficient financial experience, and the Sovereign was likely to increase macroeconomic risks for the Marshall Islands. According to Senator Casten Nemra, the Sovereign project and the negative response it had generated internationally had tainted the country's reputation.

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