Marshall Islands in trouble over cryptocurrency regulation issues

Venezuela already introduced its very own state-backed cryptocurrency, called the Petro in an attempt to save the drowning economy and help people.

The idea of a cryptocurrency becoming an official currency in any country still seems out there, as most countries do not have regulatory power over digital money.

The Marshall Islands consists of more than 1,000 small islands in the Pacific Ocean. It was considering introducing a state-backed cryptocurrency.

However, the International Monetary Fund advises the Republic to not introduce a cryptocurrency of its own. The adopted law in February of this year stated that there will be a state-backed crypto in the Marshall Islands called Sovereign.

The problem is that while the ICO is scheduled to take place some time this year, the IMF is strongly “advising” Marshall Islands not to proceed further. The major reason for that is the relationship that the commercial bank in the Islands has with one US bank. Tokens are very liquid, not very regulated and can be used for a variety of activities, including illegal ones. All of these issues raise concern for the US bank that services the Marshall Islands.

If a state-backed digital coin is introduced, the relationship may be harmed, according to press. Also, since the Marshall Islands are situated in such a geographical space amidst the Pacific, the regular occurrence of natural disasters can have an effect on the whole economy if a second official currency is introduced.

It seems that, according to the IMF, the costs are much greater than the benefits of introducing the Sovereign in the Marshall Islands for now.

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