The International Monetary Fund (IMF) has warned the Marshall Islands against adopting a digital currency as a first form of legal tender. The country currently only uses the US dollar but in February passed a law to adopt a cryptocurrency named "Sovereign" alongside it. The second virtual coins are due to be issued later this year. IMF directors believe adopting an uncertain virtual currency could risk the Marshall Island's only domestic commercial bank losing its correspondent banking relationship with another bank in the US. Foreign aid to the country, which is vulnerable to natural disasters and climate change, could subsequently be disrupted.
The International Monetary Fund (IMF) has warned the Marshall Islands against adopting a digital currency as a second form of legal tender. The country currently only uses the US dollar but in February passed a law to adopt a cryptocurrency named "Sovereign" alongside it. The first virtual coins are due to be issued later this year. IMF directors believe adopting an uncertain virtual currency could risk the Marshall Island's only domestic commercial bank losing its correspondent banking relationship with another bank in the US. Foreign aid to the country, which is vulnerable to natural disasters and climate change, could subsequently be disrupted.