The conception of Bitcoin as a digital currency has paved the way to the development of over a thousand digital currencies that are now incorporating a decentralized blockchain technology which has proven to be a more secure, fast and reliable method of monetary exchange. As a growing number of people from all over the world are starting to embrace this innovation in technology, governing bodies have also opened their eyes to its potential uses in the economy. Although many would expect that countries like the USA, Japan and other places in Europe, who are forefront in crypto investments, would be the first to develop their own cryptocurrency, other nations have stepped up and have put in the plans to create their own digital money.
Sovereign Digital Currency (SOV) - Marshall Islands
The Republic of the Marshall Islands is a Pacific island country with over a thousand islands made up of a population of about 60,000 people. The currency of the nation is the USD and they rely heavily on the annual support of 60 million USD per year through 2023 under the terms of the amended compact of free association.
Earlier this year, the nation disclosed plans to become independent from the USD. This is in line with the idea to create a state-backed cryptocurrency called the Sovereign (SOV) which has been widely supported by Marshall Islands President Hilda Heine. The plans to develop SOV were announced as early as February 2018 with an Israeli company called NEEMA to back development. Despite counteracting efforts from the International Monetary Fund (IMF), Minister-in-assistance to the president David Paul has emphasized that the country reserves the right to issue their own currency in any form - digital or fiat.
However, the IMF has criticized their plans strongly, citing that developing a digital currency could possibly cut them off from USD support. This would greatly increase financial risks for the nation. Threats from the IMF have shown to be quite effective as further plans on the development of the SOV have been put on hold.
Petro - Venezuela
Hyperinflation in the country of Venezuela, with their citizens having to pay millions of bolivars to purchase basic necessities, has led to a huge economic crisis in the nation. To alleviate this critical problem, President Nicolas Maduro has proposed the adoption of a commodity-based cryptocurrency that would be tied down to the natural resources of Venezuela - oil, gold, and diamonds.
his may be largely stemmed from the increase in Bitcoin usage and investments in 2016 when the country’s inflation rate started to increase. People began to use crypto as a means of storing their assets in a currency that was not depreciating as fast as their national money. The national currency, bolivars, was not a stable monetary asset since its value was depreciating at such a rate where its value would be cut by half in over a month.
However, problems in the development of Petro have arisen as some have gone so far as to call it a scam by the Venezuelan Government to get investors to help put up its economy. An announcement that its pre-sale this year has raised over 735 million USD has sparked an interest in this crypto. However, it is still unclear whether it will be going live sometime this November or later in 2019.
Lately, it has even been rebranded by the Venezuelan government as a “unit of oil” to the Organization of Petroleum Exporting Countries (OPEC). Further efforts to integrate the currency into the economy by requiring the use of Petro in banking and international oil markets could help wean people into using it. However, there is much skepticism about the legitimacy of the currency which has not been lessened by the many updates provided by their President. There is much opposition to Petro but Venezuela’s Petroleum Minister Manuel Quevedo claims that Petro is the future of their country’s economy as it plays a huge part in their economic recovery plan.
While it may not be a race between these countries, there is much hope that either of them would be able to push through with their plans on developing a national cryptocurrency. However, as there still appear to be many obstacles that these countries are facing before either Petro or SOV can go live, there may be other more crypto-friendly nations prepping a digital currency of their own. Hopefully. we’ll be able to see an official National Cryptocurrency, if not by the end of 2018, early this coming 2019.