In February the Republic of the Marshall Islands (RMI), an island country located near the equator in the Pacific Ocean with a population of about 50,000, announced its plan to issue a cryptocurrency that will be legal tender.

According to the plan the new currency “Sovereign” (SOV), developed in partnership with Israeli fintech startup Neema, would circulate as legal tender in the country, alongside its current local currency, the U.S. dollar. The deployment of the SOV would make the RMI the first sovereign nation to issue a cryptocurrency that is legal tender in the nation.

“This is a historic moment for our people, finally issuing and using our own currency, alongside the USD,” said RMI President Hilda C. Heine. “It is another step of manifesting our national liberty."

I concluded my February article on the planned SOV launch noting that the RMI is a tiny island nation, but it is a sovereign nation and a member of the UN. Therefore, if the RMI will eventually deploy a cryptocurrency that is also legal tender, the impact could be huge.

Huge potential impact indeed, but it's also hugely probable that the big boys will very much dislike the idea and bully the RMI to kill it in the cradle, I should have added.

Now, in "what could be seen as wise financial counseling or a threat, the International Monetary Fund [IMF] is urging the Republic of the Marshall Islands (RMI) to abandon its plan to launch a cryprocurrency as legal tender," Gizmodoreports. The IMF released a report that strongly advises against the SOV launch plan, stating that the plan would endanger the RMI's relations with the US banking system. Related: Is Diamond Demand Crumbling?

Here's the threat:

"The RMI’s only domestic commercial bank is at risk of losing its last U.S. dollar correspondent banking relationship (CBR) with a U.S.-based bank as a result of heightened due diligence by banks in the U.S. In addition, RMI plans to issue a decentralized digital currency as a second legal tender in addition to the U.S. dollar and the relevant law was enacted in February 2018..."