It’s not that they’re moving away from the U.S. dollar that’s the problem. Here’s the details…
The first problem is what the Minister-in-Assistance to the President of Marshall Islands said.
Quoted in Reuters, sourced from The Verge article discussing Marshall Islands move:
“As a country, we reserve the right to issue a currency in whatever form it is, whether in digital or fiat form”
Huge problem: Digital cryptocurrency is fiat form.
“Fiat” means nothing more than the government is forcing you to use it.
“Fiat currency”, such as the U.S. dollar, is currency, only by force.
Otherwise, the un-backed U.S. dollar would never be currency.
It has not intrinsic value and it doesn’t meet the requirements to be money.
Same goes for Marshall Island’s “Sovereign” as they will be calling it.
The “Sovereign” is a fiat cryptocurrency.
It has no value as currency other than the government forcing its use, by decree.
This leads me into an indirect problem: Perception.
You see, it’s dis-information campaigns like this, whether the “Minister-in-Assistance” to the President understands it or not, which keep this non-sense alive.
Some people are going to think – “oh, this is great, it’s cryptocurrency, not fiat”, and the problem is that most people have no idea what “fiat currency” means, and now you’re going to add a falsity on top of a subject people generally know noting about.
But I digress.
Interestingly, perhaps a side note, is that the government is going to cap the number or “Sovereigns” at 24 million.
When you can just whip up a digital fiat cryptocurrency at will, who’se to say you won’t whip up more of it?
And they will.
They always do.
Because only a bi-metallic gold & silver standard forces the government to maintain standards, call them weights and measures, and they just can’t print up gold & silver coins.
And they can’t spend what they don’t have.
And what we have here in the case of the Marshall Islands is a whole buncha dis-information.
There’s actually more problems with that one Verge article than I’ve brought up, but suffice to say, the reason Bitcoin and the other cryptos haven’t fizzled just yet is that people know just enough to be dangerous.
And otherwise unassuming people hear or read something that’s totally wrong and think nothing about it.
I’m not sure who said it, but this sums it up best:
Bitcoin is great for people who don’t understand math, people who don’t understand money, or people who don’t understand tech.
Yeah I said Bitcoin, but that’s how I heard it, and I’m sure you get my point.
– Half Dollar