Marshall Islands Warned Against Adopting Digital Currency (bbc.com) 71
The International Monetary Fund (IMF) is warning the Republic of the Marshall Islands to "seriously reconsider" the idea of adopting a digital currency as a second form of legal tender. As it stands, the U.S. dollar is the only legal tender in the islands. The BBC reports: A law to adopt a digital currency named "Sovereign" alongside the dollar was passed in February. The first virtual coins are due to be issued to members of the public via an initial coin offering (ICO) later this year. However, IMF directors said the potential benefits of the move were much smaller than the potential costs of "economic, reputational and governance risks." "[Marshall Island] authorities should seriously reconsider the issuance of the digital currency as legal tender," wrote the directors in their report, which was first spotted by Coindesk.
There is just one domestic commercial bank in the country and it is at risk of losing its only correspondent banking relationship with another bank in the U.S. That relationship allows the Islands to transfer dollars in and out of the country. It highlighted the Marshall Islands' dependence on foreign aid, and the fact that the country is vulnerable to natural disasters as well as sea level rise linked to climate change. Adopting a digital currency as an official form of legal tender would threaten both financial integrity and the nation's key relationship with the U.S. bank. The result could be disruption to foreign aid, according to the IMF.
There is just one domestic commercial bank in the country and it is at risk of losing its only correspondent banking relationship with another bank in the U.S. That relationship allows the Islands to transfer dollars in and out of the country. It highlighted the Marshall Islands' dependence on foreign aid, and the fact that the country is vulnerable to natural disasters as well as sea level rise linked to climate change. Adopting a digital currency as an official form of legal tender would threaten both financial integrity and the nation's key relationship with the U.S. bank. The result could be disruption to foreign aid, according to the IMF.
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Don't worry, a "serial entrepreneur" has been leading the project.
$5 Wrench (Score:5, Insightful)
"It'd be a shame if anything happened to your island."
Re:$5 Wrench (Score:5, Insightful)
Someone at IMF must be scared of cryptos. Little old Marshall Islands with 50K population is that scary?
Re: $5 Wrench (Score:1)
They're scared of the idea catching on and losing financial control of sovereign nations
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Re:$5 Wrench (Score:5, Interesting)
It would mean that the argument that cryptocurrency is a commodity will no longer be blindly valid, as the only arguments currently remaining against declaring it a currency equivalent, is that cryptocurrency is not recogninzed by any state as a currency, is not issued by any central bank, nor is in common use as a currency in any locale. This will break those remaining arguments.
And then, I can see people in the US suing the IRS to reclassify cryptocurrencies as a currency, and not as property.
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This was foolish of them though if they weren't threatening to without emergency disaster aid and such nobody would have likely ever known about this experiment, even if successful.
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More likely the IMF is scared of having to bail them out when their economy collapses and they come looking for a loan.
Bailouts is why IMF exists (Score:3)
IMF was created to do bailouts. If economies dont collapse IMF officials are out of a job. World Bank was created to give uneconomic loans to economies which were not sufficiently subservient to US corporate interests. Once those loans create a debt crisis, IMFs job is to come in and do a bailout and seize control of the countries economic policy and modify it to be friendly to US corporate interests.
After WW2 US had 2 choices on how to rule a worldwide empire
1) Absorb all conquered territories as US states
Re:$5 Wrench (Score:5, Informative)
"It'd be a shame if anything happened to your island."
Something already happened. America vaporized one of their islands [wikipedia.org].
MAGA (Score:2)
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Something already happened. America vaporized one of their islands [wikipedia.org].
It was a itsy-bitsy, teenie-weenie, yellow-black trefoil Bikini...
If you control the currency... (Score:5, Interesting)
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There are 53,161 citizens of the Republic of the Marshall Islands who will seeded 10% of the money supply at launch
So it looks like they're all getting free money!
Re: If I was a citizen of the Marshall Islands (Score:1)
There are 53,161 citizens of the Republic of the Marshall Islands who will seeded 10% of the money supply at launch
So is the population *seeding* the supply from their own sovereign funds, or will they *be* seeded 10% of the ICO?
Inquiring minds want to know!
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Yes.
There's another possibility (Score:5, Insightful)
Since the Marshall Islands obviously don't like being under the thumb of corporate-owned America, perhaps they should consider another option. No doubt China would love to see the yuan adopted by the Marshall Islands as its primary form of legal tender.
Being attached so closely to the Chinese would have its own downside, of course, but given the current course of the United States, the choice isn't nearly as clear as it once was.
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Of course. Thank you for your input, and your deep, abiding faith that nothing ever changes, even though it does.
I assume you're fully aware of the irony of your comment about knowing how things work. No doubt you had similar advice for the people who came up with the internet...or maybe your daddy did.
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There's a cock you should be sucking. Back to work, bitch!
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Dependency on any sort of fiat currency is disadvantageous
Compared to what?
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Do you think they'd get the same kind of static from China? It's all about the banking relationship.
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They should tell the bank to shove it... (Score:1)
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The 50,000 people that live there might think you are an idiot.
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What exactly do you think the central banks and the handful of families who are intimately tied to them are? Printed currency they have to buy in the US but they buy it at printing cost and they create digital funds just by loaning it to other banks at will. Who runs a long established mine, a 5th or better generation miner, so who do you think are the whales of fiat currency? You think the government controls the fed because a presidential appoin
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As for people investing on the speculative markets chasing gold instead of believing in the technology... who cares? These are the same market abusers who disrupt all the
Making a mountain out of a molehill (Score:3)
If you a wondering where, who and what, here's info about the Marshall Islands. [wikipedia.org]
They have a population of about 53K people, so if it all goes wrong, it's not going to be a huge crisis for the world.
Besides, they have very real health problems that they should focus on:
A 2007–2008 study revealed that the rate of type 2 diabetes is among the highest in the world; 28% over the age of 15; 50% over 35. Approximately 75% of women, and 50% of men are overweight or obese. This is mostly due to the adoption of an unhealthy diet and lack of exercise. About 50% of all surgeries performed on the island are amputations due to complications from diabetes. There are no facilities for renal dialysis.[39]
On the other hand, if you are a "chubby chaser" or you are into "nub love" then I think you just found your paradise. ;)
Re: Making a mountain out of a molehill (Score:1)
According to https://www.niddk.nih.gov/health-information/health-statistics/overweight-obesity
Percentages of obese and overweight in the US are 74% for men and 66% for women using 2014 data.
Time for regime change .. (Score:2)
Democracy from 30000 feet (Score:3)
is only sent to countries with oil.
Plot of a Neal Stephenson book (Score:2)
If they find hidden Nazi gold to finance the crypto-currency, then this is officially the sub-plot of a Neal Stephenson book.
Blackmail (Score:2)