The President of the Marshall Islands was almost toppled this week. Political foes accused her tarnishing the country’s reputation due to advocating a state-backed cryptocurrency as legal tender. She survived by exactly one vote.
Mashall Islands President Survives No Confidence Vote Over Crypto Implementation
The previous President of the Marshall Islands, Casten Nemra, was booted out of office after only two weeks by a no confidence vote. And, seeing as how those same senators comprised of the Nitijela elect the nation’s executive, threats of such a vote loom large.
Current President Hilda Heine has survived in office since 2016 as the first female to lead the country. This week that almost came to end. A no confidence vote was held by senators who oppose the 67 year old leader’s introduction of a cryptocurrency, The Sovereign, to be legal tender and act on par with the US dollar.
She won, or better put, didn’t lose, by exactly one vote. According to Nikkei Asian Review, “Heine is pushing ahead with the controversial introduction of a digital currency, known as the Sovereign, for the Marshall Islands. The plan is to give the cryptocurrency the same status as the U.S. dollar as the country’s currency.”
$30 Million Inducement
The Islands have a mere 54,000 citizens among 29 atolls in the central Pacific Ocean. The region has been a frequent site for nuclear testing by the US, and its Kwajalein Atoll holds a US Army testing facility.
The government’s Finance Minister, Benson Wase, announced the state-backed crypto still has hurdles to face in the form of approval from the International Monetary Fund (IMF), Europe, and the US.
The scheme itself is the brainchild of Israeli businessman, Barak Ben-Ezer and his company, Neema. He was said to have sold the Sovereign idea as on par with “real money… like the dollar, the euro and the yen,” according to the report. And there’s also the carrot of $30 million in potential profits from the project which probably helped the deal move forward.
IMF Not So Sure
“He said in developing the currency,” the Nikkei continued, “Neema had been looking for a country that did not have a currency of its own and the Marshalls fitted the criteria. The sovereign would have equal status with the U.S. dollar as a form of payment.” The President was sold, calling the idea an “historic moment for our people.”
A little over a month ago, however, the IMF scorned, “the potential benefits from revenue gains appear considerably smaller than the potential costs.” All the usual examples of terrorism and money laundering were trotted out by the agency. “In the absence of adequate measures to mitigate them, the authorities should seriously reconsider the issuance of the digital currency as legal tender,” the IMF urged.
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