The Republic of the Marshall Islands is a country of around 50,000 people spread across more than 1,000 islands in a remote part of the Pacific Ocean. The country relies heavily on cross-border finance and trade, now the federal government is seeking to become the first to issue a national digital currency using blockchain technology. Officials hope the move helps citizens avoid high transaction fees, simplifies compliance with international partners, and protects against inflation (the currency will have a fixed supply rate).
The new currency will be based on blockchain technology developed by Ford Professor of Engineering in MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL), and commercialized by Micali’s startup, Algorand.
There has been considerable hype around the potential for blockchain technology and associated cryptocurrencies to disrupt the way money and other assets move around the world. Skeptics of that vision say blockchain technologies are not sustainable or efficient enough for mass adoption.
Algorand believes it has solved those problems with a unique, scalable architecture that doesn’t sacrifice traditional benefits of blockchain technology like decentralization and security.
An increasing number of people are using Algorand for a wide range of applications, from creating carbon credit marketplaces to expediting real estate transactions and, in the case of the Marshall Islands, creating new legal tender.
The advent of blockchain technology has opened up a world of opportunity for small nations. When the country announced its plans. By issuing a currency that is not physically embodied in cash, that can travel the globe instantly, and that is tamper-proof and completely secure, the Marshall Islands will finally be connected to the global financial system on its own terms.