Marshall Islands launches its central bank digital currency (CBDC) on Algorand blockchain. The island nation aims to reduce its dependence on the US dollar, which is currently its national currency.
03 March, 2020 | AtoZ Markets – The Republic of the Marshall Islands (RMI) has chosen Algorand, a company specializing in blockchain, as its technological partner for its CBDC. Its digital currency project the Marshallese Sovereign (SOV) unveiled in February 2018. The Marshall Islands have taken a new step in their development by partnering with Algorand, a major blockchain startup.
Algorand to Power Marshall Islands’ CBDC
SFB Technologies is a company that develops SOV's blockchain infrastructure. It has revealed that the CBDC of the Marshall Islands will be launched on Algorand protocol. The Algorand protocol will be implemented to provide the SOV initiative with speed, scalability, security. The protocol also provides the required compliance controls such as identity management and the compliance platform.
Today, the Republic of the Marshall Islands announced the first national digital currency, the Marshallese sovereign (SOV), will be built using Algorand’s #blockchain: https://t.co/8fS6adYj2b @SOV_Foundation #digitalmoney #SOV @jpwgnr pic.twitter.com/qkiFQmxPgy— Algorand (@Algorand) March 2, 2020
Founded in 2017 by Silvio Micali, Algorand is an open-source blockchain protocol provider, permissionless and with proof-of-stake blockchain protocol. It also allows the development of scalable blockchain solutions for real use cases. The company is at the origin of the evolution of DeFi by enabling the creation and exchange of value.
The SOV initiative positioned as the "first national digital currency in the world". Jim Wagner, CTO and co-founder of SFB Technologies also said:
"We selected Algorand after an in-depth market study among the main protocol options. The company has already supplied several common use cases. Due to its unique characteristics, the platform has the functionality required to issue, manage and distribute the SOV globally. It also ensures that the SOV will build on a scalable and secure platform."
In line with previous reports, the announcement specifies that the SOV will be distributed through a token presale. Specifically, the national digital currency will introduce through a series of auctions as part of an early release monetary issue. However, it expected to start this year, the statement said.
SOV Supply Will Be 4% Each Year
In a statement, Algorand clarified that the SOV would circulate alongside the US dollar, which is used as the official currency in the country. It will also help the Marshall Islands to function effectively in the world economy. The national digital currency initiative will regulate by the RMI government. The SOV supply will algorithmically fix at 4% growth per year to prevent inflation.
"Marshall Island's vision is for global participation and inclusion in an open financial system by harnessing the benefits of blockchain technology. It is consistent with a truly global and decentralized society. We also believe it made possible with our technology. We are proud to support the country on its revolutionary journey towards the adoption of digital currency, "said Silvio Micali, founder of Algorand.
Kenneth Kedi, President of the Parliament of the IRM, also expressed positive opinions on the new technology partnership. Moreover, he said that the addition of Algorand strengthens the team that supports the SOV initiative as well as the development of the financial services sector in the country.
SFB Technologies is a technology provider that focuses on the development of the blockchain infrastructure that required to bring together digital currencies and general regulatory compliance.
Think we missed something? Let us know in the comment section below.