A country has made a blockchain based currency its legal tender

Republic of the Marshall Islands has just created a new currency called  SOV (short for “sovereign”) and it is a real currency for the nation.

According to the website, this means that  unlike Bitcoin, Libra, and other cryptocurrencies SOV is money, just like the dollar or the euro.

The supply of the coin (SOV) is algorithmically fixed, so it grows slowly and sustainably which means it cannot be manipulated by governments or banks.  Anyone can use SOV, and new SOV are distributed evenly and fairly among all SOV holders. The SOV’s compliance protocol ensures every SOV user has compliance checks with a registered verifier, but user details are kept private.

Where is Republic of the Marshall Islands?

Its is located in the space between the Philippines and Hawaii in the  Pacific Ocean.  The country’s population of 53,158 people and traditionally use the American Dollar.

There is a great quote on the website about why they created the SOV:

Like all resources, money cannot be limitlessly exploited. Our global addiction to creating money is sending us towards a cliff edge. We need a new and sustainable approach.

SOV removes the temptation to overexploit the money supply by fixing its increase at 4% annually. What’s more, everyone benefits when new SOV are created, not just banks and governments.

It seems that the project is in response to all the issues we are currently having in traditional fiat currencies. They seem to have a view that the current system is broken and this government-backed currency is the answer.