The Marshall Islands are obviously a relatively small market, and the IMF devotes a chunk of their report to the new currency and the risk of losing their correspondent banking relationship (CBR) in the section "PROTECTING FINANICAL STABILITY" which is 3-4 pages (starting on page 6)
I recommend you read it yourself. The IMF's primary concerns seem to be AML issues and the prior existing risk to their CBR, which amount to a large amount of risk for such a small country to take on. Note the Marshall Islands are part of the Compact of Free Association with the US and are highly dependent on the US for almost everything, so having a falling out with the US would be really bad for them.
Maybe I haven't drank enough kool-aid but I'm unconvinced this is the IMF making threats (it's not like the IMF really has any power anyway) and more them advising the Marshall Islands that they're likely in dicey territory with the US regulators and that that is a substantial risk to their economy.
The IMF report is overly biased because it does not take into account the benefits that the Marshall islands could obtain from being an economy with a crypto official currency. For example, having a crypto official currency would eliminate currency controls and could encourage new economic activity on the island.
The Marshall islands is desperate for solutions to grow their economy so they have very little to actually lose if they do adopt it. The IMF report does not reflect this.
The IMF report... does not take into account the benefits that the Marshall islands could obtain... For example, having a crypto official currency would eliminate currency controls and could encourage new economic activity on the island.
Right now the official currency is the US dollar so there are no currency controls. Any what activity would be encouraged by not using the dollar, especially in an area with so little population?
>The Yokwe Protocol brings modern blockchain technology inline with international banking and regulatory standards, enabling users to answer the two most common questions asked by banks: “who are you” and “what is the source of your funds?”
>To send SOV from a wallet, a user must first have an identity token provided by a pre-selected, reputable Know-Your-Customer (KYC) company. This way money always flows between identified accounts.
when you dive into the facts, you then realized the Marshallese aren't so naive in their acceptance of sov coin.
The infrastructure as well as for the smart contracts are all there to make the new system immutable, decentralized and a tool for economic independents.
the Yokwe protocol is there to try and make AML a thing of the past and move the markets forward, by using a smart KYC protocol you eliminate most obstacles in their way.
I lived in the Marshall Islands for two years. AMA.
My current thoughts are that of all countries to adopt crypto, MI makes little sense. Only on the main island do people have cell phones. Smart phones are even less common. Internet is a rare commodity. On the outer island, they barely have a reliable mail system. Electricity is pretty much non existent. They get their power by using solar panels to charge car batteries. They use those to power tvs and such. But internet and phone's, etc, are completely non existent on the outer islands.
That being said, some islands already have a "ledger", where the people themselves never actually have money, they just earn "credits" and can make orders with them. The ledger is mostly a trust based system with the "lord". So a public, immutable ledger here would be cool, but they lack the culture and technology to have that everywhere.
People need to understand, the Marshalls is a small country, consisting of less than a hundred thousand of people. The islands in the Micronesia are small, isolated, and can hardly sustain themselves without foreign aid. I had never heard this till now even though my parents are from a nearby island.
I did some searching, and the only thing I could find in articles about it were quotes from the CEO of Neema and quotes from politicians. Not a single quote from any normal person on the street and whether they think its a good idea or even know what's going on. It smells very fishy to me.
Finally, I'll say, I don't have the kindest opinion of the IMF, but adopting a potentially volatile cryptocurrency and thinking they'll be able to augment their internal commerce with it is ill-fated.
> Not a single quote from any normal person on the street and whether they think its a good idea or even know what's going on.
I never really expect to hear normal, man-on-street, type folk queried about international monetary policy.
Personally, I don't think my few semesters of economics qualify me to discuss the economic impact of a US Federal Reserve decision. In a democratic government, we have to trust that the powers which we elect, have placed suitably expert people into the bureaucracy and act accordingly to their advice.
There are 50K people in the Marshalls. Imagine a rural town in the US decided to do something like this[0]. Wouldn't the strangeness of the arrangement with the small size of the city prompt a reporter to ask a random farmer or guy on the street? That would be the first thing I'd imagine. Regardless, I get it, unlike a small town, you can't really just ship your reporter on a road trip there without buying a $3K ticket, I'm just hinting that it's hard to tell whether people on the ground are really aware this is going down from just reading about it.
Regarding the politicians it's very possible that the policy makers were sold a one sided perspective on this. People in the pacific just don't have access to information that people elsewhere do. That said, I'm not Marshallese, so I don't know the circumstances of the vote so I'm assuming a lot here. I've just seen a similar script play before in Palau and it usually doesn't turn out well.
[0] Of course, cities can't issue their own currency practically, so the analog doesn't really work.
> "The IMF is not strong-arming the Marshalls, what they're doing is describing what will obviously happen if they proceed - the large correspondent bank will be quite worried," he added.
This guy really is an expert at "no really this isn't a threat wink wink".
> In 2014 Barak [CEO of this Sov coin] founded Neema, a Y-Combinator company focused on easy, fast and secure money transfers for the unbanked.
Can anyone shed any light on Neema? It seems to be the forerunner to this. Very unusual for a YC company - it has almost no coverage on HN whatsoever - just two mentions that I can find in the search.
>There is just one domestic commercial bank in the country and it is at risk of losing its only correspondent banking relationship with another bank in the US.
Is that a statement of fact, or a threat the IMF is making?
However, IMF directors said the potential benefits of the move were much smaller than the potential costs of "economic, reputational and governance risks".
Many in the cryptocurrency space throw around the "currency is not real" and "currency only has value because we believe it does." These cliches betray an ignorance of the very real power relationships at play in the space.
The strength of the US dollar is supported not just by the imaginations of its users, but by the political and trade relationships made and sustained by the will of the US government.
This is just one small example of the weight thrown around when the dominance of the dollar is threatened.
When I saw the headline here my first question was, which crypto currency? Are we now lumping all crypto currencies together, when the broad category of "crypto" contains everything from Bitcoin to dogecoin to proposed ERC20 coins that only exist on paper? I too would warn everyone against using certain crypto coins for anything
A public ledger provides greater protection against
money laundering and other criminal activities than a
paper currency does
This is not true, especially when it comes to larger amounts.
For example, laundering millions of dollars in cryptocurrencies was easily achieved though services such as ShapeShift which up until recently had no KYC/AML paper trail. If someone wants to launder millions of dollars in physical cash, they would need a business acting as a "front" which could be scrutinized to an audit.
The Bitcoin network allows anyone to move millions of
dollars across the world without any in-person
meetings, and without the approval of any financial institutions.
The Russians also created Bitcoins themselves through
the process known as mining, the indictment said.
This detail is particularly interesting, because if we assume state sponsored spies with a technical understanding of how the internet and the Bitcoin protocol works, that this sort of transaction could be untraceable to the source and so it would be safe to assume their operation was discovered though other forensics outside of blockchain records.
> ... laundering millions of dollars in cryptocurrencies was easily achieved though services such as ShapeShift ...
I'd like to request a source on that. It was my understanding that ShapeShift limited trade sizes, so moving large amounts was difficult, impractical, slow, and exposed to a lot of market value risk.
Another famous way to launder money as described in this post from a moderator on BitcoinTalk dated August 22, 2013, 02:32:31 AM [
https://bitcointalk.org/index.php?topic=279249.0
] , is to give Bitcoin to a mining pool in return for renting their hashpower, in return for freshly minted coins:
Please forgive me if I'm being dense, but I was asking for a source to the claim that ShapeShift (in particular, since you singled them out above) could "easily" be used to launder "millions of dollars." After reading through these links, I'm still not convinced. Only one link you listed mentions ShapeShift, which to some credit, suggests a theoretical, many-step, multi-blockchain process for using ShapeShift in such a way.
My understanding still hasn't changed that "moving large amounts [with ShapeShift before AML/KYC] was difficult, impractical, slow, and exposed to a lot of market value risk," but I'm interested in evidence to the contrary.
Sealioning (also spelled sea-lioning and sea lioning) is
a type of trolling or harassment which consists of
pursuing people with persistent requests for evidence or
repeated questions, while maintaining a pretense of
civility so as to discredit their target
ShapeShift was setup without any KYC/AML or login, thus it facilitated automation.
More obviously, the entire ecosystem is designed for money laundering. As evident the previous post, and any rudimentary search will turn up countless results on services or guides on using native wallet apps for Bitcoin or Monereo to mix and launder wallet addresses.
The point of laundering money with a front business is to make it look like it has a legitimate source (e.g. carwash customers). Using Shapeshift just obscured the source of your funds, which is a completely different thing and doesn't help you convince a bank to keep your account open.
The Marshall Islands are obviously a relatively small market, and the IMF devotes a chunk of their report to the new currency and the risk of losing their correspondent banking relationship (CBR) in the section "PROTECTING FINANICAL STABILITY" which is 3-4 pages (starting on page 6)
I recommend you read it yourself. The IMF's primary concerns seem to be AML issues and the prior existing risk to their CBR, which amount to a large amount of risk for such a small country to take on. Note the Marshall Islands are part of the Compact of Free Association with the US and are highly dependent on the US for almost everything, so having a falling out with the US would be really bad for them.
Maybe I haven't drank enough kool-aid but I'm unconvinced this is the IMF making threats (it's not like the IMF really has any power anyway) and more them advising the Marshall Islands that they're likely in dicey territory with the US regulators and that that is a substantial risk to their economy.