The Marshall Islands is planning to issue its own legal cryptocurrency which will be circulated along with the U.S. dollar, according to Finance Magnates.

Called Sovereign or SOV, the cryptocurrency will reflect a parallel medium of exchange, along with the USD. CoinDesk reported that the legislators passed the Declaration and Issuance of the Sovereign Currency Act 2018 on February 26, 2018.

"The purpose of this Act is to declare and issue a digital decentralized currency based on blockchain technology as legal tender of the Republic of Marshall Islands," CoinDesk quoted the bill as posted in the Sovereign's official Telegram channel.

The Marshall Islands will conduct an initial coin offering (ICO) to distribute the cryptocurrency to the public. The ICO will be open to global investors, while the residents of the Marshall Islands will receive a free allocation of the cryptocurrency.

“This is a historic moment for our people, finally issuing and using our own currency, alongside the USD. It is another step of manifesting our national liberty,” Hilda C. Heine, President of the Marshall Islands (RMI), said. “The RMI will invest the revenues to support its climate change efforts, green energy, healthcare for those still affected by the US nuclear tests, and education. In addition, SOV units will be directly distributed to citizens,” she added.

According to CTech, Israeli startup Neema is developing the technology for the SOV tokens. It will use “Yokwe” protocol which addresses anonymity issues related to cryptocurrencies. The protocol requires all accounts to be linked with real identities that government verified, but remain encrypted and private.

The SOV initiative is part of the country’s broader vision to move towards a more blockchain-based economy. This includes the launch of the cryptocurrency and blockchain-based biometric IDs.

The Marshall Islands’ cryptocurrency initiative comes on the heels of similar effort by Venezuelan government which kicked off the pre-sale of “Petro” cryptocurrency on February 20.