Marshall Islands makes cryptocurrency legal tender

Located near the equator in the Pacific Ocean, the Marshall Islands is part of the larger island group of Micronesia. There are a total of 1,156 islands and islets forming the Marshall Islands, upon which live around 53,000 people. Its primary economic industry has been shipping, but that soon could change.  The country is looking to offer a proprietary digital currency, which would be legal tender alongside the local fiat currency.

The Marshall Islands made the U.S. dollar its legal currency in 1982. The anticipated sovereign currency (SOV) would be recognized as legal currency for business transactions and citizens on the islands. If it’s successful, the move could be a world’s-first in truly embracing digital currency, with the underlying blockchain technology playing a vital role in the growth of the economy.

Neema, a financial technology company out of Israel, was the first to propose the idea to the island nation. The government is hoping to promote a traceable, progressive system of transactions, while cleaning up its reputation as a hub for money laundering.

The government, led by President Hilda Heine, has fully backed the idea, according to reports. Upon launch, the U.S. dollar will co-exist with the SOV, with both being equally defined as currency. There are no plans to remove the dollar as legal tender.

David Paul, the country’s Minister in Assistance to the President and Environment, helped put the plan together for President Heine. He indicated that the SOV will be designed so that it is completely unusable for nefarious transactions such as money laundering. With all transactions registered on a public blockchain, it will be virtually impossible, unlike with fiat, for it to be manipulated by fraudsters and thieves.

Neema is a money-transfer company that provides a vehicle for sending funds over smartphones. According to its website, Neema gives “….you the freedom to send money from your phone, anywhere and anytime. When sending with us, you enjoy an easy, fast and secure service.” It offers the ability to send money from Israel to the Philippines, Nepal, India and Sri Lanka.

In a statement to CoinGeek, Neema CEO Barak Ben-Ezer said, “This project is ground breaking because it is the first crypto that will be considered legally money worldwide, thanks to its legal tender status in the Marshall Islands.”

Correction: Marshall Islands is the first country that Neema approached with the idea for a proprietary digital currency after due diligence.