The island nation is moving ahead with its plan of a digital currency despite warnings from international bodies.

The First National Digital Currency of the World

The emergence of Malta as an international blockchain and cryptocurrency hub is inspiring other island nations to follow its footsteps.

The Marshall Islands, officially the Republic of the Marshall Islands, an island country located in the Pacific Ocean, is pushing ahead with its plan to launch the world’s first national cryptocurrency.

The country’s government announced last week that it had roped in blockchain expert Steve Tendon to help with setting up the related policies.

Acting Against Advice from International Bodies

The island nation is going ahead despite being cautioned by the International Monetary Fund (IMF) against making such a move. The IMF had indicated that adopting a digital tender could spoil the country’s economic reputation.

President Heine addressed the country’s parliament, reportedly saying:

Here is an opportunity. There may be other strategies, but for now, we have this idea we could float and see the outcome. We need to take a step forward.

Currently, the Marshall Islands uses the United States dollar as its official currency. Having its own national cryptocurrency is likely to free the nation from its dependency on U.S.-based banks to process cross-border payments.

Some believe that such an action could destabilize current banking systems and damage relationships with overseas institutions.

“We recommend that the authorities seriously reconsider the issuance of the digital currency as digital tender,” said Manrique Saenz, IMF’s mission chief to the Marshall Islands.

Implementation Details

Cryptocurrencies are digital currencies that enable instant peer-to-peer transactions without the need for third-party intermediaries like banks. Digital currencies use blockchain as its underlying technology layer.

The Marshall Islands’ government has engaged Neema, an Israel-based fintech firm that has built payments solutions, to help create its national cryptocurrency.

Steve Tendon, a blockchain expert who is credited with creating Malta’s blockchain policies, has been roped in to thrash out some existing issues.

We will have to wait to see the economic impact of implementing such a national cryptocurrency. In case the experiment becomes successful, we may see more nations following suit.

Do you think this is a good move by the government of the Marshall Islands? Let us know in the comments below.

Images courtesy of Pixabay and U.S. Department of State.