January 2019 has seen several important crypto announcements from authorities around the globe. Namely, developers working for the Marshall Islands said in a blog post that a state-issued cryptocurrency project called Sovereign (SOV) would be released in 2019. Additionally, the United Arab Emirates and Saudi Arabia are in the midst of developing joint cross-border cryptocurrency.
They come amidst heavy criticism of Venezuela’s Petro and Iran’s national cryptocurrency. Petro’s adoption rate has been slow, with just a small number of organizations and individuals taking part. However, as more state-issued cryptocurrency projects take off, they could soon find a role in the banking sector.
State-issued cryptocurrencies in development
Venezuela is one of the prime examples of how governments are trying to use crypto as a solution to economic problems. Other countries such as Russia and North Korea are also considering launching their own projects to bypass sanctions. So far, only Venezuela’s Petro and Iran’s cryptocurrency have come to fruition.
Since Iran faces hard US sanctions and bans from SWIFT, crypto could present the solution to the problem. However, the US government appears to be against the proposal. US lawmakers have launched a bill in December that could restrict the usage of Iranian state-issued cryptocurrency outside the country’s borders.
It’s not just that economically unstable regions are turning to crypto. There are also several examples of developed countries expressing interest in the technology. Recently, the United Arab Emirates (UAE) and Saudi Arabia announced an initiative to create a joint pilot cryptocurrency. The deal, signed in Abu Dhabi on January 19, would connect the two countries’ banking systems with a blockchain.
On another part of the world, developers working for the Marshall Islands announced the upcoming launch of a state-issued cryptocurrency: Sovereign (SOV). Over the past year, multiple disagreements have threatened to disrupt SOV during its development. However, it seems that will see the light of day in 2019. The cryptocurrency is set to take its place alongside the USD as the islands’ national currency. This small nation hopes to attract larger investors to help streamline the digital coin’s application.
SOV’s developers said:
“The crypto markets are much softer than this time last year. As such, it’s clear we need to shift strategies from attracting standard investors to forging partnerships with powerful allies that have a vested interest in seeing that sovereign crypto money succeeds.”
Banks warming to the idea of digital currencies
Major financial institutions are slowly warming to the idea of state-issued cryptocurrency. Recently, the Bank for International Settlements (BIS) published a report in which 66 central banks expressed their views on digital currencies (CBDC). Three central banks clearly showed an interest in developing their own coins, two from emerging and one from advanced economies. Their identities remained undisclosed. Although this rate was quite low (only 4.5 percent), the results suggest that a handful of countries might develop their own crypto solutions in the future.
In addition to institutions that are “highly likely” to engage with a state-issued cryptocurrency, about 15 percent of banks expressed mid-level interest. Moreover, almost 35 percent of respondents considered making long-term commitments to blockchain technology.