Why in news?
The Marshall Islands will launch the world’s first legal tender cryptocurrency. A law in this regard has been passed by the parliament
FACTS FOR PRELIMS
The Marshall Islands has partnered with Israeli company Neema to issue 24 million units of the Sovereign (SOV) digital currency.
The SOV will require users to identify themselves, thus avoiding the anonymity that has kept bitcoin and other cryptocurrencies from gaining support from governments.
How is it different from ‘Petro’ cryptocurrency?
Venezuela had launched the Petro cryptocurrency in February. Unlike the Petro, the Sovereign (SOV) will be recognized in law as legal tender, holding equal status as the US dollar, which is the Pacific island nation’s current currency.
SOV is based on permissioned protocol, dubbed “‘Yokwe” (meaning “hello” in local island language), which requires blockchain users of this digital currency to authenticate and identify themselves, thus avoid anonymity that has kept other cryptocurrencies from gaining support from governments.
SOURCE – THE HINDU.