12 Jun 2019

Marshall Islands sets up fund for national cryptocurrency

8:40 am on 12 June 2019

The Marshall Islands has set up a private fund for its planned national cryptocurrency.

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Photo: AFP

The country is developing the legal tender currency Sovereign (SOV) to serve alongside the US dollar there.

Last week, the government unveiled the SOV development fund which will hold 30 percent of the currency's initial supply.

David Paul, the Minister-in-Assistance to the President, said the fund would be independent.

"We are designing SOV in a way that is not putting any burden on the government's finances. The currency funds itself. The development is paid in SOVs, the long-term maintenance of the network is also paid in SOVs," he told a blockchain summit in New York last week in a pre-recorded video.

In September, the International Monetary Fund said the Marshall Islands should "seriously reconsider" SOV because of economic risks.

The development fund will be governed by a board of seven directors, two nominated by the Marshall Islands government and two by SFB technologies, the company contracted to develop SOV infrastructure.