The International Monetary Fund (IMF) issued a report, which called on the authorities of the Marshall Islands to abandon the release of its own cryptocurrency. The digital asset was to become the second means of payment in the country after the dollar and then replace it.
In a 58-page report, the IMF writes about the country's volatile economy and its dependence on the United States. According to the organization, the emergence of a national cryptocurrency will aggravate relations with Washington. The American Central Bank will sever ties with the republic, as it does not have the proper measures to combat money laundering. As a consequence, the major banks of the United States will refuse to work with this country. Reactions from local authorities have not yet come.
Plans to create a national Marshall Islands digital asset called Sovereign (SOV) were unveiled in February. The coin is going to be released on the market before the end of this year. With governmental help the new Marshall Islands Crypto is expected to replace the dollar.
WHY IS IT IMPORTANT?
- The islands are closely connected to the U.S.: the republic has been created in 1979, but the U.S. dollar remains the main means of payment. The reason for pressure from the IMF may be that cryptocurrencies are thought to threaten traditional assets. In June, IMF deputy head Dong He published an article stating that digital assets could reduce the demand for central bank money.
- Speaking of security, a few days ago, the US Democracy Foundation has reported that terrorists prefer to use cash instead of cryptocurrency for their activities. The national digital asset of the Marshall Islands would probably be of no interest.