Marshall Islands Officially Make Crypto Their Sovereign National Currency

Avi Rosten
  • Their new cryptocurrency called the Sovereign (SOV) will take the place of the USD as the sole national currency
  • Designed by Israeli fintech company Neema, the new currency will be the legal tender for the Pacific nation

The first sole sovereign cryptocurrency has been signed into law today as the Marshall Islands - a sovereign state and UN member - has put in place a bill to make its national legal tender its own cryptocurrency.

Their new national cryptocurrency is called the Sovereign (SOV) and will be the official legal tender for businesses and the 53,000 citizens of the Pacific islands.

Breaking the news today, crypto trader and host on CNBC Africa - Ran Neuner - explained that the move for the tiny nation was significant because (in theory at least) it means that financial institutions such as banks and Visa will have to accept the SOV as it is now the legal tender of a sovereign nation:

According to a report from thenextweb in April, the cryptocurrency was designed by Israeli fintech company Neema - and the project was the idea of CEO Barak Ben-Ezer who sought out nations without their own national currency for crypto adoption. The Marshall Islands - although their own republic since 1982 - use the USD as their legal tender, but will now start to use (presumably in conjunction with the USD) the new SOV cryptocurrency that was today signed into law.

This new adoption - and its suggested ramifications for the banking world - are no doubt an interesting development for the space as the crypto-world pushes for broader institutional acceptance.

IBM’s VP of Blockchain and Crypto on World Wire, XLM, Ripple, XRP, and BTC Price

On Wednesday (February 20th), during an interview with Australia's largest comparison site Finder.com.au, Jesse Lund, IBM's Vice President of Blockchain and Digital Currencies, talked about his company's cross-border payments solution "IBM Blockchain World Wire" (which runs on the Stellar network), how this product differs from what Ripple is doing with xRapid, and gave his medium term (end of 2019) and long term (some day) price predictions for Bitcoin (BTC).

In this article, we focus on some of Lund's most interesting comments made during this interview.

IBM Blockchain World Wire

"The architecture of World Wire is really a cross-border payment network, the magic of which is the ability to send a payment message instruction saying 'Hey, I'm sending you something; get ready!' and on the other end, the receiver is making sure that who you are sending it yo is not some nefarious actor or bad actor, but once that happens, and that happens really fast, then we send the value along, and that transfer of value is made possible by an ecosystem of digital settlement instruments, of which [Stellar] lumens is one."

"IBM's long game in this is to be the network operator... So, the subscribers, the customers, if you will, of World Wire are market makers who really provide the pay in, pay out locations, and they themselves have corporate clients and probably retail clients. So, we're really providing a kind of conduit through which money can flow in real-time." 

IBM Blockchain World Wire vs. Ripple's xRapid

"Credit Ripple for the vision of using a digital asset in order to enact immediate settlement with finality. I think their implementation followed one path. Our implementation is a little bit different. We are not the issuer of an asset. In fact, what we believe is that there should be an ecosystem of a variety of digital assets that provide the settlement instruments that enable these cross-border payments. The participants on the network should be able to choose and negotiate their choices in real-time and the pricing might be different depending on the settlement instrument you use. So, I think with Ripple, they're looking at XRP as the primary digital asset for settlement, and for us, it could be lumens, it could be Ripple, it could be XRP even, it could be Bitcoin, but it would also probably include other instruments like stablecoins and even eventually, hopefully soon, central bank issued digital currencies."

Bitcoin (BTC) Price Prediction

"[Bitcoin's price at the end of 2019] ... I think it's going be higher [than today], I'll go with $5,000, but let me just say this. I've got a long term outlook... I see Bitcoin at a million dollars some day."

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