In February 2018, The Republic of Marshall Islands (RMI) Nitijela passed the Declaration and Issuance of the Sovereign Currency Act 2018. The purpose was to declare and issue a digital blockchain-based crypto-asset (the “SOV”) as the RMI’s legal tender, which is currently the U.S. dollar (the RMI does not have a central bank). There have been a number of false starts since then, but in September 2020, The RMI SOV Development Foundation announced the launch of a public auction of Sovereign Subscription Rights to international investors. According to Peter Dittus, Chairman of the SOV Development Foundation’s advisory committee, the SSRs will be sold by auction over a period of 18 months, giving the government time to judge how the SOV works within the current market and assess demand for the instrument, before deciding whether or not to go ahead with a full-scale launch.
If it ever launches, the SOV will be run on the Algorand open-source, proof-of-stake blockchain protocol. The SOV won’t be built on the public Algorand blockchain but a permissioned version, known as a “co-chain” that is interoperable with the public blockchain and other private chains, as needed. This will give the SOV Development Foundation greater oversight of the network. By making the public and private blockchains interoperable, organizations can isolate and control sensitive data on a private blockchain, while still safely interact with the world at larger scale, through an interoperable public blockchain. Co-chains are totally independent from the associated public chains, shielding all transactions from all outsiders, chooses its own validators, and runs its own consensus algorithm. And co-chains automatically inherit the characteristics of the associated public chains.