Sovereign Currency Act of 2018

{{short description|Marshallese legislation}}

Image:SOV cryptocurrency symbol.png

Sovereign Currency Act of 2018 is a statute of the Legislature of the Marshall Islands which was passed on February 26, 2018. The Act created and issued a digital decentralized currency ("cryptocurrency") that is used as a legal tender of the Marshall Islands.{{cite web |last1=Ejukaan |first1=Jepilpilin Ke |title=Declaration and Issuance of the Digital Sovereign Act 2018 |url=https://rmiparliament.org/cms/images/LEGISLATION/PRINCIPAL/2018/2018-0053/DeclarationandIssuanceoftheSovereignCurrencyAct2018_1.pdf |website=Nitijela: The Parliament of the Republic of the Marshall Islands |accessdate=29 September 2018 |date=26 Feb 2018}}

The Sovereign Currency Act of 2018 creates and issues the Sovereign (SOV) its own cryptocurrency. The purpose of the Act was to lower the dependence on the USD.{{cite web |last1=Keane |first1=Jonathan |title=Inside the Marshall Islands' plans to launch its own legal tender cryptocurrency |url=https://thenextweb.com/hardfork/2018/04/23/marshall-islands-cryptocurrency/ |website=The Next Web |accessdate=29 September 2018 |date=23 Apr 2018}}

The Sovereign cryptocurrency was created through a partnership with Neema, a financial technology startup.{{cite web |last1=Chavez-Dreyfuss |first1=Gertrude |title=Marshall Islands to issue own sovereign cryptocurrency |url=https://www.reuters.com/article/us-crypto-currencies-marshall-islands/marshall-islands-to-issue-own-sovereign-cryptocurrency-idUSKCN1GC2UD |website=Reuters |accessdate=29 September 2018|date=28 Feb 2018}} Neema uses "Yokwe" protocol to ensure anonymity while also linking each account with a verified government identity that is both encrypted and private.{{cite web |title=Marshall Islands to issue legal cryptocurrency "Sovereign" |url=https://www.econotimes.com/Marshall-Islands-to-issue-legal-cryptocurrency-Sovereign-1184602 |website=EconoTimes |accessdate=29 September 2018 |date=6 Mar 2018}} The SOV is issued by the Ministry of Finance and was introduced through an initial coin offering (ICO). The number of SOV’s in circulation will start at 24 million and will grow by 4% each year.{{cite web |title=crypto that is real money. |url=https://www.sov.global/ |website=Sov |accessdate=29 September 2018}} RMI President Hilda C. Heine called the creation of SOV "another step of manifesting our national liberty."{{Cite web|date=2019-02-18|title=How the Marshall Islands envisions its national digital currency dubbed 'sovereign'|url=https://www.pasifikarising.org/how-the-marshall-islands-envisions-its-national-digital-currency-dubbed-sovereign/|access-date=2021-11-08|website=Pasifika Rising|language=en}}

In September 2018, the International Monetary Fund (IMF) released a report warning the Marshall Islands not to launch its own cryptocurrency. Primary concerns about the cryptocurrency included that the revenue from the ICO would be smaller than expected and that proper governance on the cryptocurrency were not adequate.{{cite journal |title=Republic of the Marshall Islands: 2018 Article IV Consultation - Press Release; Staff Report; And Statement by the Executive Director for Republic of the Marshall Islands |journal=International Monetary Fund |date=Sep 2018 |volume=18/270 |url=https://www.imf.org/~/media/Files/Publications/CR/2018/cr18270.ashx |accessdate=29 September 2018}}