By Bill Taylor/Contributor
It’s not the United States, Europe, China or even Latvia, BUT it just could be the first “toe in the water”. The Pacific republic of the Marshall Islands has dumped the U.S. dollar and created its own cryptocurrency to be the sovereign currency for its population. Now, in case you don’t know, the Marshall Islands is a small country way down in the South Pacific BUT is actually quite advanced in the fintech world. They have a very ‘friendly’ regulatory environment and with the new official cryptocurrency not afraid to “put their money (crypto-money) where their mouth is”.
Why is this tiny island nation considered a “toe in the water” news story? Glad you asked that. Obviously huge countries like the U.S., China, Canada, etc .will NOT be the the first to officially go to a cryptocurrency since it would take years for new regulations and voter approvals. Indeed, in the Euro zone it is illegal for countries to issue their own currencies………..again. That’s why the little Marshall Islands just may be the “leader” in adopting a digital currency token. Currently Italy, with its recent elections, has cast doubt on whether it will stay in the EU and/or drop the Euro. Crazy huh? Not so much. So, what if a large developed country like Italy decided to make its sovereign currency a cryptocurrency? And then Spain, and then………..??? Not so far fetched.
The Marshall Islands decided to launch it’s sovereign token via an initial coin offering (ICO) and is capping the the supply at 24 million tokens as a precaution against inflation – kind of like bitcoin and actually quite brilliant. Now the new sovereign crypto token will be legal tender and credit card companies, banks and merchants will need to accept the tokens for all transactions. Remember, great ideas start in small places and then grow from there. It may be worth noting, and following, the lead of the small island nation way down in the South Pacific.
Bill Taylor is Managing Partner at Fintek Capital & a frequent contributor to FintekNews