A Switzerland-based ‘smart card’ wallet manufacturer, Tangem will issue physical banknotes for the Sovereign (SOV), the state digital currency of the Marshall Islands, according to an announcement on Jan. 28.
The announcement states that the physical representations of the digital currency is to ensure that citizens have “fair and equal access to their digital currency, whether or not they have internet connection.”
The firm further notes that the physical SOV will be a “controllable mechanism” for issuing the currency by the Marshallese government. The Minister-in-Assistance to the President of the Marshall Islands, Minister David Paul, elaborated:
“Tangem will help us ensure all citizens, including those living on more remote outer islands, are able to easily and practically transact using SOV.”
As per Tangem, each note will contain a blockchain-enabled microprocessor that will “combine the familiar advantages of paper banknotes with the security of blockchain technology.” In May 2018, the firm issued the physical representations of digital currency, 10,000 physical Bitcoin (BTC) banknotes of various denominations in a pilot program.
The Republic of the Marshall Islands first announced that it would release its own cryptocurrency complete with an Initial Coin Offering (ICO) and free trading in February 2018. At the time Two government officials said that once issued, the Sovereign will circulate alongside the nation’s other official currency, the United States dollar.
The announcement of issuing a national cryptocurrency created a controversy within the country and with international organizations like the International Monetary Fund (IMF). Marshallese government was advised by the IMF in August 2018, to reconsider, citing that issuing the Sovereign could pose risks to the country’s financial integrity and relationships with foreign banks.
The pushed the Marshallese President Hilda Heine to a vote of no confidence in the country’s parliament, the Nitijela. The parliament had initially backed the creation of a national digital currency, however, the critics of the president declared that the proposed plan for a state-backed digital currency could harm the country’s reputation
After narrowly surviving the vote of no confidence in November 2018, with the Nitijela split 16-16, Heine told the parliament that the attempt to overthrow her was a “referendum about our own politics,” and hailed plans for the Sovereign as a “historic moment for our people.”