WASHINGTON — The Marshall Islands is gearing to release a digital currency this year, although officials acknowledged Friday there is much work still to be done to alleviate concerns of United States financial regulators.
The launch date of the currency, known as the “SOV,” has yet to be decided.
“We plan to launch SOV this year,” said Barak Ben Ezer, chief executive officer of Neema, the Israel-based company that is partnering with the Marshall Islands government to develop the digital currency.
A primary issue for the launch is that following the boom in 2017 and early 2018, the crypto-currency market value has plummeted.
“We are working days and nights to prepare the foundations of the SOV initial coin offering, with the goal of being ready to launch once positive momentum is back to the markets,” Ben Ezer said.
“It will be done once all stakeholders are convinced that SOV is ready, risks have been mitigated, and momentum is building.”
Neema and the Marshall Islands are working through a multitude of US regulatory concerns as well as the technological and logistical side of issuing the SOV using blockchain technology.
The Marshall Islands, a tiny Pacific atoll nation with a population of just 55,000, passed legislation a year ago to develop digital currency as legal tender.
The plan has since been criticized by the International Monetary Fund, the US Treasury Department and bank officials in the Marshall Islands.
They argue it has the potential for a negative impact on existing banks and for money-laundering, but Ben Ezer believed that once fully developed, the SOV will be one the safest monetary systems in the world.
The US Treasury has concerns about “anonymous digital currencies, such as Bitcoin, [which] are often used for illicit purposes by people who want to conceal their identity,” Ben Ezer said.
But, with SOV every account would be fully identified and buyers would be checked against the US Office of Foreign Asset Control “so only legitimate, law-abiding people can use the SOV.”