The Marshall Islands, an island country and a United States associated state, is reportedly planning to launch its own cryptocurrency, called Sovereign (SOV), at some point during this year.

However, there is currently a considerable amount of ongoing development work that needs to be completed before Marshall Islands’ cryptocurrency can be introduced. This, according to a recent report published on the Taipei Times, which also confirmed that US financial regulators had expressed concerns regarding using a national cryptocurrency.

SOV Could Launch “This Year”

It now appears that Marshall Islands’ government is moving forward with its plans as Barak Ben-Ezer, the CEO at Neema, an Israel-based firm that is helping to launch the digital currency, remarked:

We plan to launch SOV this year.

One of the main problems previously cited for introducing a sovereign cryptocurrency is that digital assets have been highly volatile and can pose serious risks to investors. Commenting on the development work being done before launching the SOV, or the Sovereign, Ben-Ezer stated: 

We are working day and night to prepare the foundations of the SOV initial coin offering, with the goal of being ready to launch once positive momentum is back in the markets.

SOV Will Only Be Launched Once “Stakeholders Are Convinced It’s Ready”

He also mentioned: “It will be done once all stakeholders are convinced that SOV is ready, risks have been mitigated and momentum is building.” Currently, Marshall Islands’ government and Neem are reportedly working on addressing several regulatory requirements outlined by American financial regulators.

There are also logistical and technological factors that need to be considered before introducing a national cryptocurrency, which are currently being reviewed by Neema and the authorities in the Marshall Islands.

Last year, the Pacific island nation with a population of around 55,000, passed legislation that suggested developing a national cryptocurrency and using it as legal tender. Soon after the plan to use a state-backed crypto was proposed, it was heavily criticized by the US Treasury Department, the International Monetary Fund (IMF), and several bank officials working in the Marshall Islands.

Concerns About “Anonymous” Nature Of Cryptocurrencies

Bank officials said that launching the Sovereign could adversely affect the island’s existing financial system as it would allow for illicit activities such as money laundering. However, Ben-Ezer has noted that the cryptocurrency is being developed carefully, with these risk factors being considered, and that the SOV will be one of the world’s safest monetary systems.

Moreover, the US Treasury has expressed concerns regarding “anonymous [crypto]currencies, such as Bitcoin, [which] are often used for illicit purposes by people who want to conceal their identity,” Ben-Ezer mentioned.

But Ben-Ezer also clarified that every account that is opened using the SOV will have to go through mandatory know-your-customer (KYC) checks. New accounts will also have to be verified against the US Treasury’s Office of Foreign Assets Control (OFAC), “so only legitimate, law-abiding people can use the SOV,” Ben-Ezer said.