Marshall Islands warned against adopting digital currency
bbc.com
bbc.com
The Marshall Islands are obviously a relatively small market, and the IMF devotes a chunk of their report to the new currency and the risk of losing their correspondent banking relationship (CBR) in the section "PROTECTING FINANICAL STABILITY" which is 3-4 pages (starting on page 6)
I recommend you read it yourself. The IMF's primary concerns seem to be AML issues and the prior existing risk to their CBR, which amount to a large amount of risk for such a small country to take on. Note the Marshall Islands are part of the Compact of Free Association with the US and are highly dependent on the US for almost everything, so having a falling out with the US would be really bad for them.
Maybe I haven't drank enough kool-aid but I'm unconvinced this is the IMF making threats (it's not like the IMF really has any power anyway) and more them advising the Marshall Islands that they're likely in dicey territory with the US regulators and that that is a substantial risk to their economy.
The Marshall islands is desperate for solutions to grow their economy so they have very little to actually lose if they do adopt it. The IMF report does not reflect this.
Right now the official currency is the US dollar so there are no currency controls. Any what activity would be encouraged by not using the dollar, especially in an area with so little population?
saying they have solutions for AML:
>The Yokwe Protocol brings modern blockchain technology inline with international banking and regulatory standards, enabling users to answer the two most common questions asked by banks: “who are you” and “what is the source of your funds?”
>To send SOV from a wallet, a user must first have an identity token provided by a pre-selected, reputable Know-Your-Customer (KYC) company. This way money always flows between identified accounts.
My current thoughts are that of all countries to adopt crypto, MI makes little sense. Only on the main island do people have cell phones. Smart phones are even less common. Internet is a rare commodity. On the outer island, they barely have a reliable mail system. Electricity is pretty much non existent. They get their power by using solar panels to charge car batteries. They use those to power tvs and such. But internet and phone's, etc, are completely non existent on the outer islands. That being said, some islands already have a "ledger", where the people themselves never actually have money, they just earn "credits" and can make orders with them. The ledger is mostly a trust based system with the "lord". So a public, immutable ledger here would be cool, but they lack the culture and technology to have that everywhere.
And I'll take you up on your kind AMA offer: why would you live there for two years?
I did some searching, and the only thing I could find in articles about it were quotes from the CEO of Neema and quotes from politicians. Not a single quote from any normal person on the street and whether they think its a good idea or even know what's going on. It smells very fishy to me.
Finally, I'll say, I don't have the kindest opinion of the IMF, but adopting a potentially volatile cryptocurrency and thinking they'll be able to augment their internal commerce with it is ill-fated.
I never really expect to hear normal, man-on-street, type folk queried about international monetary policy.
Personally, I don't think my few semesters of economics qualify me to discuss the economic impact of a US Federal Reserve decision. In a democratic government, we have to trust that the powers which we elect, have placed suitably expert people into the bureaucracy and act accordingly to their advice.
Regarding the politicians it's very possible that the policy makers were sold a one sided perspective on this. People in the pacific just don't have access to information that people elsewhere do. That said, I'm not Marshallese, so I don't know the circumstances of the vote so I'm assuming a lot here. I've just seen a similar script play before in Palau and it usually doesn't turn out well.
[0] Of course, cities can't issue their own currency practically, so the analog doesn't really work.
This guy really is an expert at "no really this isn't a threat wink wink".
https://www.thebalance.com/the-biggest-one-day-forex-major-m...
Can anyone shed any light on Neema? It seems to be the forerunner to this. Very unusual for a YC company - it has almost no coverage on HN whatsoever - just two mentions that I can find in the search.
Is that a statement of fact, or a threat the IMF is making?
Who is really in charge?
The strength of the US dollar is supported not just by the imaginations of its users, but by the political and trade relationships made and sustained by the will of the US government.
This is just one small example of the weight thrown around when the dominance of the dollar is threatened.
A public ledger provides greater protection against money laundering and other criminal activities than a paper currency does.
A public ledger provides greater protection against
money laundering and other criminal activities than a
paper currency does
For example, laundering millions of dollars in cryptocurrencies was easily achieved though services such as ShapeShift which up until recently had no KYC/AML paper trail. If someone wants to launder millions of dollars in physical cash, they would need a business acting as a "front" which could be scrutinized to an audit.
The Bitcoin network allows anyone to move millions of
dollars across the world without any in-person
meetings, and without the approval of any financial institutions.
The Russians also created Bitcoins themselves through
the process known as mining, the indictment said.
I'd like to request a source on that. It was my understanding that ShapeShift limited trade sizes, so moving large amounts was difficult, impractical, slow, and exposed to a lot of market value risk.
https://old.reddit.com/r/CryptocoinMixing/
https://bitcointalk.org/index.php?topic=436467.0;all
https://darknetmarkets.org/a-simple-guide-to-safely-and-effe...
https://ethereum.stackexchange.com/questions/2699/is-there-a...
Vitalik Buterin himself has attempted a money laundering feature into the Ethereum Virtual Machine codebase: https://github.com/ethereum/serpent/blob/develop/examples/ec...
Another famous way to launder money as described in this post from a moderator on BitcoinTalk dated August 22, 2013, 02:32:31 AM [ https://bitcointalk.org/index.php?topic=279249.0 ] , is to give Bitcoin to a mining pool in return for renting their hashpower, in return for freshly minted coins:
My understanding still hasn't changed that "moving large amounts [with ShapeShift before AML/KYC] was difficult, impractical, slow, and exposed to a lot of market value risk," but I'm interested in evidence to the contrary.
Sealioning (also spelled sea-lioning and sea lioning) is
a type of trolling or harassment which consists of
pursuing people with persistent requests for evidence or
repeated questions, while maintaining a pretense of
civility so as to discredit their target
More obviously, the entire ecosystem is designed for money laundering. As evident the previous post, and any rudimentary search will turn up countless results on services or guides on using native wallet apps for Bitcoin or Monereo to mix and launder wallet addresses.