The Republic of the Marshall Islands has announced the establishment of a development fund that will directly support the development of the SOV, a planned national cryptocurrency for Marshall Islands.

This is despite thinly-veiled threats from the International Monetary Fund (IMF) that banks may choose to stop working with the tiny island nation should they choose to go ahead with its plans to wean itself off the US dollar.

In a press release, the state-established non-profit SOV Development Fund has been mandated to support the government in establishing, implementing and maintaining the SOV, which will be the nation’s digital legal tender.

Minister in Assistance to the President, David Paul, had addressed the Blockchain for Impact Summit at the United Nations Headquarters in New York, explaining how 30% of the token’s initial supply would be endowed to the fund:

“We are designing SOV in a way that will not place any burden on the government’s finances. The currency funds itself.”

Dr Peter Dittus, Chief Economist for SOV and former Secretary General of the Bank for International Settlements (BIS) further explained the fund’s mandate:

“… to maintain the SOV infrastructure long term; to seed the ecosystem around the SOV; to promote the SOV and its uses, both domestically and internationally; [and] to smooth the volatility… by selling and buying SOV against USD.”

The fund hopes to be fully independent, overseen by a seven-member board of directors. Two each will nominated by the state, a company called SFB Technologies, which will develop the token infrastructure. These four will then appoint three further directors from internationally recognized experts in blockchain, banking, and monetary management.

The press statement says that after the establishment of the national crypto, it will transition to a blockchain-based model of alternative governence, Once the blockchain and currency were established, the goal is to transition to an alternative governance model based on blockchain.

 

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