Marshall Islands Issues CBDC On Algorand Blockchain

Algorand Foundation stated that one of the first central bank digital currencies (CBDC) will be issued on the Algorand blockchain. The Republic of Marshall Islands plans to create a state-supported digital currency. The Marshallese sovereign (SOV) will help reduce the republic’s dependence on the US dollar — for now, it is the current currency in the republic.

David PAUL, the Minister-in-Assistance to the president of the Marshall Islands, said the digital currency on the blockchain will help reduce cross-border transaction fees, taking into consideration the remoteness of the islands. Jim WAGNER, co-founder and CTO of SFB Technologies, explains why the Algorand blockchain was chosen for the release and distribution of SOV:

“Algorand has the functionality required to issue, manage and distribute the SOV on a global level. This partnership ensures that the SOV will be built on a scalable and secure platform.”

However, not everyone is satisfied with the plans of the Marshall Islands. The International Monetary Fund sharply criticized the republic’s plans to issue digital currency at the planning stage already. In an IMF September 2018 report, the fund recommended to cancel the issuing of the digital currency, thinking about the potential risks and costs.

Image courtesy of Climate Central