After receiving criticism for her state-backed cryptocurrency plans, the president of the Marshall Islands, Hilda Heine has had a motion of no confidence brought against her.
The leader of the Republic of the Marshall Islands (RMI), Hilda Heine, definitely wants to be a trailblazer. Not only is she the first female president in the Pacific Islands, but she is also actively encouraging the adoption of virtual currencies in her country.
Icy Reception from the IMF
Live Bitcoin News reported on how the RMI had already passed a law to allow for the development of its state-backed digital currency, the Sovereign (SOV). The plan is to have the SOV be an alternative medium of exchange to the U.S. dollar. According to The Guardian, at the time of the passing of legislation, Heine stated that her country should “advance into the future”. In order to achieve this goal, Heine planned to collaborate with Neema, an Israeli-based remittance company.
However, the president faced strong criticism from the International Monetary Fund (IMF) who believes that the financial aid that the country relies on during frequent natural disasters could be put in jeopardy as many traditional financial institutions are still not accepting of virtual currencies. It also added that cryptocurrencies could be used for “money laundering and terrorist financing”.
In addition, the IMF feels that the Israeli start-up has “limited financial sector experience”. It added that the company has no guidelines for “transaction monitoring, reporting of suspicious transactions, compliance monitoring, and sanctioning of compliance failures”
Heine responded that she doesn’t “see any indication of us being harmed … this is not an illicit activity. This is not illegal and our laws will not be tarnished”. However, the IMF is not the only authority that is concerned. In fact, Heine actually needs to look closer to home.
Heine Faces Vote of No Confidence
The 5th of November saw eight senators launch a vote of no confidence against her. Radio New Zealand reports that the introduction of the SOV is listed as one of the reasons for the vote. Senator Casten Nemra stated that the plan for the launch of the currency has impacted negatively on the country’s reputation and has gained condemnation from both the IMF and the U.S. Treasury Department. Interestingly, Nemra is a previous president of the RMI but was unseated by Heine after a successful motion of no confidence was brought against him just three weeks after his election.
Heine’s vote of no confidence is scheduled for the 12th of November, the results of which will determine the future of the proposed SOV.
Do you think that Heine will be unseated? Is the SOV doomed to fail? Let us know in the comments below!
Images courtesy of Pixabay, Shutterstock