The Marshall Islands, a US-associated state near the equator in the Pacific Ocean, has signed an agreement with Tangem, a Swiss company developing blockchain-enabled smart card wallets for cryptocurrencies, to introduce Sovereign (SOV), the world’s first decentralized digital currency in physical banknotes form.

According to Tangem, SOV will be represented in the form of smart cards powered by blockchain-enabled microprocessors. It has been reported that the digital currency will join the U.S. dollar as the official legal tender of the island. The card users will be able to make transactions without paying any fees, and it is also claimed that end-users won’t be required to have an Internet connection while processing a transaction.

However, the International Monetary Fund (IMF) has opposed the state’s plans to launch SOV. In September 2018, it asked the island not to create a national digital currency, due to associated concerns such as macroeconomic and money-laundering risks.