A small island country in the Pacific has plans to launch its own government-issued cryptocurrency called the Marshallese sovereign (SOV). It was revealed Wednesday at CoinDesk’s Invest: Asia event that the Republic of the Marshall Islands (RMI) would be introducing the SOV through a forthcoming token pre-sale.
Called the Timed Release Monetary Issuance (TRMI), RMI minister David Paul explained that anyone (regardless of location) can register for the pre-sale on the newly launched website of the SOV Development Foundation. Paul stressed that the actual pre-sale for SOV – in which users buy TRMI units that can later be exchanged one-for-one with SOV units – is not yet live and is still “a work in progress.”
But once launched, Paul estimated it would be 18 to 24 months, or even less, before the real SOV is made available to the public.
“It could be well-vetted enough right before the TRMI that we don’t need the full 18 to 24 months,” Paul said. “You probably only need six months if all the preparation is done beforehand.”
One of the primary reason for doing this pre-sale, according to Paul, is to get a sense of the levels of liquidity and market interest in the SOV cryptocurrency.
“TRMI is really another way of doing an [initial coin offering] but in a more responsible and methodical manner. That’s really the TRMI. You have to look at how to establish liquidity. When you do TRMI, you’re looking at the appetite for the product and how it’s going to [behave] in the markets.”
This is a doubly important concern for government officials in the Marshall Islands given that the launch leaves no room for failure.
“For us, it’s really the reputation and integrity of a country on the line. We’ve got one shot at this,” said Paul.
Apart from gauging market interest, Paul and his team at the non-profit SOV Development Foundation are also focused on addressing regulatory concerns surrounding the SOV raised by other countries and international organizations.
Last September, the International Monetary Fund (IMF) advised against the SOV project saying that the introduction of a cryptocurrency as legal tender in the country could “increase macroeconomic and financial integrity risks.”
Even the U.S. Treasury had told the RMI government “point-blank,” according to Paul, that it didn’t like the SOV. However, following nearly a year of internal discussions, Paul affirmed that U.S. officials are saying this project could work.
Getting the regulators on board is a key prerequisite to launching the TRMI, Paul said, adding:
“A nation cannot rebrand [like a company can]. That’s why we have to do this in such a way that’s different. It has to be transparent. It has to be inclusive. We need to make sure that we work with regulators to ensure that once we launch, they don’t go back and say, ‘Oh, you haven’t done this. You should have done that.’”
David Paul image via CoinDesk LIVE at Invest: Asia 2o19