SOV Coin : La crypto-monnaie légale des Îles Marshall
The Marshall Islands is planning to launch a national cryptocurrency, helped by Israeli startup Neema.
The SOV crypto coin will soon become legal tender in the Pacific republic of Marshall Islands, after the country's parliament approved the creation of a national digital asset. The Neema company is assisting with the ICO for the SOV token, expected by the end of 2018. Cryptovest spoke to the CEO of Neema, Barak Ben Ezer.
The idea to launch SOV coin with the approval of the Marshall Islands parliament comes as a response to the complicated manner of treating Bitcoin for tax purposes. Any time Bitcoin is exchanged, laws might require disclosure for eventual capital gains.
"I came up with an Idea: let’s create a crypto which is the legal tender of a sovereign nation. This way, legally, it’s real money just like USD, Euro, Yen. And this regulatory clarity on a cryptocurrency, - the SOV- represents a profound leap in mainstream adoption potential," said Ben Ezer.
He added that the Petro, Venezuela's intended crypto coin, is not actually recognized as national legal tender, so SOV coin is the first of its kind. Transacting in SOV would not trigger a potential tax event at every step.
SOV is Unique for Being Legal Tender
SOV is a one-of-a-kind cryptocurrency for being “legal tender” as recognized by the Marshall Islands government. As Ben Ezer explained,
"This is the breakthrough with SOV, as it is the first legal tender crypto."
This means that the SOV digital asset can serve to repay all debts public and private in the Marshall Islands. So in effect, SOV is the first crypto coin to fit the definition of state-issued money, which must be accepted as repayment for debts.
Launching SOV Coin
The time frame for SOV coin is expedient: the pre-ICO stage starts in three weeks, and the ICO is intended to happen within three months.
In those two rounds of financing, 24 million units total would be distributed, and during the crowd sale, 12 million tokens would be available.
SOV coin will have a similar blockchain to that of Bitcoin, with scalability and mining improvements. But the biggest advantage of SOV is that it would be recognized as real "money". Despite being approved by a nation state, the control over the currency, transactions and balances remains decentralized, depending on trustless transactions performed through network communications and mining.
The coin will still have a predetermined supply and a transparent structure, and the government will not interfere with the supply. SOV coin will also be an open-source project.
In terms of market price, Ben Ezer believes the value would be determined by the demand for the coin. SOV coin would be attractive due to tax benefits and other advantages such as speedy transactions.
"We belie that from the $100B+ bitcoin market cap, we can imagine a sizeable amount shifting into SOV," said Ben Ezer.
Neema is an Israeli fintech firm offering an app for instant cheque cashing services.
The Marshall Islands government will set aside some of the proceeds from the ICO for a national fund to be used for health and social services.
At the moment, there are countries such as Germany which consider Bitcoin a unit of account. This means that merchants can choose to accept the coin, but are not obliged to. Also, Bitcoin transactions, when used for purchases, are not taxed in Germany, but some believe moving Bitcoin may trigger tax events. However, Bitcoin does not have “legal tender” status in Germany, and does not fit the definition for ‘real money’ issued by a nation state (unlike SOV).
And so far, no government has been directly involved into coordinating the issuance and distribution of a digital asset through an ICO, and giving a crypto coin the status of official money.