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Marshall Islands ‘contributing to own demise’ by trying to create new cryptocurrency: report

Marshall Islands ‘contributing to own demise’ by trying to create new cryptocurrency: report
Marshall Islands ‘contributing to own demise’ by trying to create new cryptocurrency: report
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The Marshall Islands Government has made international headlines with its plan to become the first in the world to establish a digital currency as legal tender.

Even if it succeeds, critics are arguing that such a policy would undermine the Marshalls’ very prominent stance on climate change, and actually expand the size of the North Pacific territory’s own carbon footprint, Pacific Beat reports .

The director of the Centre for Software Practice at the University of Western Australia, Dr David Glance, said the two best known currencies — Bitcoin and Ethereum — use as much electricity in a year as the whole of Venezuela.

“If you convert that into CO2 emissions, it’s massive,” Dr Glance said.

“So the idea that Marshall Islands are going to be contributing to their own demise by using a technology which consumes far more energy than normal transactions on the internet is something that they’ve overlooked, or chosen to overlook.”

So even if the digital currency takes off, the Marshall Islands Government would appear to be taking aim at their own feet on the question of global warming.

Giff Johnson, editor of the Marshall Islands Journal, said it was not as if the Government needed the money.

He said he believes the problem is that the money is not being well spent.

“What’s going to change the picture is when people are willing to be held accountable for their work performance in government, and until that time, no amount of money is going to improve the basic health, education, and social indicators in this country,” Mr Johnson said.

It took a week of vigorous debate to get the Marshall Islands digital currency act through Parliament, but in the end the bill passed with a clear majority by 20 votes to eight.

Mr Johnson said that was just as well, as most people in the country are not ready for digital finance.

“In order to use digital currency, you have to be in the digital world,” he said.

“Of course we do have thousands of cell phone users here, but your average person doesn’t have that capability here, and also the minimum wage is only $US2.50 an hour, so I think there are lot of issues in all of this, for the local population’s engagement.”

To emphasise the point, Dr Glance said internet in Marshall Islands is slow and expensive, as is the cellular network which is only 2G.

“They’re not a digital nation,” he said.

Dr Glance said questions were also being asked about the Israeli start-up group that put the idea of a digital currency to the Marshalls’ Government in the first place.

“Who’s going to monitor it, what’s that monitoring going to be used for, what privacy measures will be in place, what does the Israeli company have to do with all of this?” he said.

“If they’re providing the technology, is that run out of Israel? Is the data of the people of Marshall Islands going to be secure?”

While the Marshall Islands Government and its Israeli partners ponder a date for the roll out of their digital sovereign, a huge amount of suspicion surrounds ICOs, to the extent where they have been banned in China and South Korea.

Originally by Richard Ewart for Pacific Beat