Proposal To Launch National Cryptocurrency Lands Marshall Islands President In Trouble
Lawmakers are concerned that the jurisdiction's financial system might be eroded in case the plan pushes through.
Vote Of No Confidence Presented Against Marshall Islands Head
The leader of the Marshall Islands Hilda Heine has landed in hot water over the country’s policy on cryptocurrencies. Heine is now facing a vote of no confidence following the government’s plan to roll out a national digital currency.
The nation’s legislature had earlier approved a motion to establish a national crypto dubbed Sovereign. The currency, SOV, was set to be released before this year ended. The crypto would be deployed alongside the US dollar which is the Islands' official currency.
However, on Monday, a section of the Senate is said to have presented a vote of no confidence in the state. According to the region's constitution, a vote of no confidence should be conducted after five to ten days after the request is presented. The motion is believed to have been presented in parliament during the last sitting of the year and only requires a simple majority to be approved.
According to former Vice President, Carsten Nemra, setting up a national cryptocurrency will paint the country in a bad light. The plan received backlash from leading global financial institutions like the IMF and the respective American agencies.
Recently, the IMF issued a warning to the Marshall Islands' government regarding the risks involved with issuing a national crypto. The IMF stated that a crypto might ruin the integrity of the country’s financial system as well as partnerships with global banks. The body advised the authorities to reconsider the decision until the implementation of strong policies to govern the sector.
According to senators, Heine should be kicked out of office over the recent proposal on creating an investment haven on Rongelap Atoll. The government turned down the proposition stating that it went against a number of laws across the region. Interestingly, the senator behind the vote of no confidence also supported the establishment of such an investment.
Heine’s plan to launch a national cryptocurrency coincided with Venezuela’s launch of the Petro. The Petro was released by the government to fight the endemic problem of escalating inflation which has skyrocketed to catastrophic levels. The Venezuelan Petro was also launched to defeat sanctions imposed by the US and the EU. President Nicolas Maduro announced that the Petro funded crypto bank would be used for projects to empower the youth.