The president of Pacific nation Marshall Islands has survived a no-confidence vote from the parliament in the wake of her intentions to launch a national cryptocurrency.
The move came after the President Hilda Heine suffered a backlash after promoting a central bank digital currency (CBDC) model cryptocurrency to replace the current fiat system. As part of its arrangement with the United States, Marshall Islands uses the US dollar and in return, USA provides security and other measures.
Heine was opposed to the US having this much monetary control and resorted to the idea of a nationalized cryptocurrency called the Sovereign (SOV) back in February that could be used alongside the USD.
However, after the IMF warned Marshall Islands over this move, lawmakers from the country’s legislature became apprehensive regarding the move and the move for a no-confidence vote was submitted. Critics, including former president Casten Nemra, believed the move would tarnish the reputation of the country in the international community.
Nemra also caused political rifts to deepen following a corruption scandal regarding a USD 1 billion compensation paid by the US for citizens affected by nuclear tests carried out near them. With this deep division of confidence on her leadership, Heine probably breathed a sigh of relief after the vote came 16-16 tied, falling just one short of the required number to force her resignation.
But on the downside, the digital currency SOV initiative doesn’t have a clear mandate now. Progress may continue but will likely be slower and will warrant further checks from the legislature and other stakeholders. The government is also looking to fulfill the requirements of IMF and the European Union regarding the new currency.
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