Best Bitcoin Card for Marshall Islands

The International Monetary Fund (IMF) is putting pressure on the Marshall Islands. They are to deviate from their plan to have their own crypto currency. The move by the financial institution from Washington shows once again how central bankers are taking action against the introduction and spread of crypto currencies. The decision of the islands could also play a role for other states in similar situations.

IMF puts Marshall Islands under pressure for own crypto currency

It was not until March that the government of the Marshall Islands announced that it was working on its own crypto currency, the Sovereign (SOV). The crypto currency was to be disseminated with the help of a facial recognition program. In this way the supervisory authority wanted to prevent money laundering with the help of Sovereign. Now the International Monetary Fund has advised the Marshall Islands against publishing the currency. The fund cites as reasons the warnings to which crypto fans have long become accustomed.

In the 58-page report, the IMF warns that American banks could refuse to cooperate with companies on the islands if the digital currency were to be put into circulation. This could have a negative impact on the 53,000 inhabitants of the islands. The idea for the publication of the Sovereign was an initial coin offering together and a special distribution among the inhabitants of the island. The IMF’s warning therefore seems draconian and exaggerated. The report says:

“The potential benefits from revenues from [the digital currency] appear to be much lower than the potential costs of the risks to the economy, reputation, money laundering/financing of terrorism and leadership control. In the absence of appropriate measures to curb them, authorities should seriously consider issuing the digital currency as legal tender”.

Intimidation or protection?

The IMF’s report repeatedly addresses the risks of money laundering and terrorist financing. Nevertheless, the low market capitalisation of SOV and the current legislation on the Marshall Islands make it difficult to imagine these dangers. In addition, the US House of Representatives said this week that terrorists prefer cash rather than crypto currencies for financing.

The Republic has not been under the control of the United States since 1979. Yet the country’s currency is still the US dollar. The size of the islands and their proximity to the US could play a role in the IMF’s stance.

It should also be remembered that state crypto currencies or decentralised coins such as Bitcoin, if accepted by the masses, could change the current power structures and the role of institutions such as the IMF.

A report by Deputy Managing Director Dong He said that “crypto investments could one day minimize the demand for central bank money”. He also wrote that central banks should “prevent the competitive pressure that crypto investments exert on traditional currencies”.

Other countries that are also considering publishing a state crypto currency will closely monitor the government’s decision and its consequences.