Political turmoil within the Marshall Islands isn’t helping its planned cryptocurrency…
In the face of growing financial pressures that are biting smaller countries and islands hard, a small number are turning towards cryptocurrency as an option.
One of those is the Marshall Islands, whose Parliament back in February of this year introduced the Declaration and Issuance of the Sovereign Currency Act 2018. Behind that, er, jazzy title lies the idea of introducing a cryptocurrency for the island. Thus far, it’s reliant on the US dollar for its day to day transactions. For its new crypto, it is looking to partner with Neema, an Israeli company, who would have the job of creating the currency for the islands.
The problem, though, is that the plan has attracted the interest of the International Monetary Fund (IMF). The IMF has expressed concern that the plan the Marshall Islands has put across doesn’t have necessary safeguards in place. The IMF is engaged in a battle against terrorism funding and money laundering, and is pushing back against the island’s plan, it seems. As per a report this autumn, the IMF argues that “the potential benefits from revenue gains could be considerably smaller than the potential costs arising from economic, reputational, and governance risks”.
Set against this, earlier today the leader of the Marshall Islands, President Hilda Heine, survived a motion of no confidence in her leadership – but only just. The vote came in at 16 to 16, meaning she’s survived by one single vote. Heine had argued that the motion was brought because she and her government refused to back the idea of an independent tax haven within the islands, to try and attract hi-tech firms.
Where all this leaves the digital currency plan remains to be seen. This story appears to be far from over…