The President of the Marshall Islands has survived a cryptocurrency related vote of no-confidence in her leadership, which could indicate that the Republic of the Marshall Islands (RMI) might get its cryptocurrency after all. The RMI is a small country and is currently hosting its own ICO to boost its economy. The sovereign country uses the US Dollar as its national currency and has only one US bank relationship, which has led to financial hardship. This has forced the country to experiment with cryptocurrency. However, the IMF has warned the country that if they proceed, they will be cut off from aid, placing the Marshall Islands in a difficult situation.
Caught between superpowers
The vote was concerned primarily with the launch of the new token (SOV), and President Hilda Heine barely survived with a split vote of 16/16. As per reports, the plans of the RMI to launch their own cryptocurrency remains intact despite the IMF advising against it. It was IMF opposition against the idea of a country launching its own sovereign cryptocurrency that prompted the vote in the first place, though Chinese interests were also promoting her demise. China is reported (by President Heine herself in The Guardian) to be interested in extending its influence in the Marshall Islands, who are trying to maintain their independence between the two players. In 1986, the Marshall Islands attained their independence from the USA.
The battles between the superpowers often take place far from their own shores, such as Syria and Iraq. In this instance, the struggle between China and the USA is taking place in the Marshall Islands. Neither is for the independence of the Marshall Islands, but both want to exert influence in a key strategic position. China is already expanding its business and political interests in various locations, especially Canada, South East Asia, and the Americas.
A national cryptocurrency for the tiny state of less than 53,000 is the perfect solution. It would represent a new paradigm where a country of lesser stature does not have to choose a powerful ally to stay afloat but can utilize cryptocurrency to go its own way. It is actually small and independent nations that are leading the way in terms of DLT expansion, most notably Malta, Estonia, Japan, Dubai, and Switzerland. China, the USA, India, and Russia are in most instances hampering the development of the technology. However, launching a sovereign cryptocurrency and going head to head against the USA is a bold move that, historically speaking, ends up in catastrophe.
A risky maneuver by the Marshall Islands?
While there are many advantages to using cryptocurrencies as opposed to fiat currency, the RMI will face very real and severe consequences if they proceed to oppose the IMF and US financial interests. Venezuela, Turkey, and Iran have already suffered heavily and it is questionable if the RMI can support themselves should they continue with their sovereign currency. Argentina is propped up solely by IMF funding. If these funds vanished then the country would almost certainly collapse, as it is already in severe decline. The IMF published a paper warning against the move –
“In the absence of adequate risk mitigating measures, the issuance of a decentralized digital currency as a second legal tender would not only increase macroeconomic and financial integrity risks but elevate the risk of losing the last U.S. dollar CBR…external aid and other flows could be disrupted, which would result in a significant drag on the economy.”
The USA fighting on all fronts
It seems that the USA is fighting on all fronts to preserve the Dollar. Sanctions have been issued against Venezuela, Iran, and Turkey, who have been resistant to dollar hegemony. The SEC is claiming that the majority of cryptocurrencies are securities, in spite of the fact that many of these cryptocurrencies have the sole aim of being jurisdictionally independent without ties to any nation-state, such as the DAO.
Most telling is that the alliance between the USA and Europe has almost completely disintegrated, without a common enemy to fight against. Europe has promised to reimburse companies suffering at the hands of US sanctions in relation to trading with Iranian companies, as a geopolitical battle takes places between the two former allies. Every day more fires need to be put out to preserve US dominance intrinsically linked to oil, the USD, and the military-industrial complex. The last remaining allies of the USA seem to be the UK, the UAE, and Israel. US aggression has even pushed China and Russia into an uneasy alliance, and the China/US trade war is ongoing.
The launch of a sovereign cryptocurrency by the Marshall Islands is of huge symbolic and practical significance, especially since the country in question is so weak relative to the two superpowers it is caught between. Hopefully, cryptocurrency can help facilitate the independence of the small state into a place of full autonomy. It is, after all, what they were designed for.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.