Algorand and SFB to Power Marshall Islands Central Bank Digital Currency
SFB Technologies, a full-cycle digital agency focused on blockchain development has announced that Alogorand’s blockchain protocol will be used to develop the national digital currency of the Marshall Islands dubbed Marshallese Sovereign (SOV).
Marshallese Government Targets World’s First CBDC
According to an announcement issued by blockchain developer SFB Technologies, work on the Marshall Islands’ central bank digital currency (CBDC) will be facilitated using Algorand’s blockchain infrastructure and protocol. The news was announced via a press release published on Monday (March 2, 2020).
SFB Technologies was approved to operate as the organizer of the SOV project by the Marshallese government. The agency then partnered with Algorand, the developer of the world’s first open-source pure proof-of-stake blockchain protocol.
Commenting on the move to leverage Algorand’s blockchain infrastructure, co-founder and chief technology officer of SFB Technologies, Jim Wagner said the firm’s open-source protocol was chosen for its speed, scalability, and security. Wagner further remarked:
“Algorand was selected after extensive market research among the leading protocol options. The company has already powered several mainstream use cases and thanks to its unique features the platform has the functionality required to issue, manage and distribute the SOV on a global level.”
Wagner also said that Algorand’s protocol provides the necessary compliance controls and transaction finality required for a CBDC. Silvio Micali, the founder of Algorand, has expressed his firm’s resolve to support the Marshall Islands on its journey towards mainstream crypto adoption through the utilization of blockchain technology. Micali noted that:
“The Marshall Island’s vision for global participation and inclusion in an open financial system by harnessing the benefits of blockchain technology is aligned with a truly global and decentralized society that we believe is made possible with our technology.”
According to the Marshallese government, the supply of the SOV crypto will be fixed to grow at 4 percent per year to avoid the risk of runaway inflation. Also, the CBDC will be introduced through a token pre-sale in a series of auctions as part of a time-release monetary issuance (TRMI), per reports.
Expanding CBDC Playing Field
The partnership between Algorand and SFB for the development of the SOV project represents a significant milestone in the country’s efforts towards mainstream crypto adoption. However, the government of the Marshall Islands has long since been vocal about its intentions to issue a national digital currency.
As previously reported by BTCManager, the country’s parliament passed a bill approving the launch of SOV as an official legal tender back in February 2018. In September 2019, Minister of Assitance to the President of the Marshall Islands, David Paul revealed that the country was on the verge of issuing its blockchain-based national sovereign crypto.
In other parts of the world, central banks race to issue their own respective CBDCs. Recently, Japanese lawmakers have been agitating for the Bank of Japan to fast track efforts in issuing its state-backed crypto to counter China’s digital yuan.