SOV Development Foundation creates first cryptocurrency for a nation. Here’s how it works

The SOV Development Foundation has created the first cryptocurrency legal tender for a nation, marking a significant milestone in the world of digital currencies. In a recent interview with CNBC Africa, Peter Dittus, Chairman of the foundation, shared insights into the project and shed light on the potential impact of this development. The foundation has been working closely with the government of the Marshall Islands to ensure that the cryptocurrency, known as the SAF, operates effectively as legal tender. Dittus mentioned that the government is currently finalizing the due diligence process to guarantee the seamless operation of the SAF in the country. In parallel, SAFB Technologies is gearing up for a sale of soft subscription rights for international investors to purchase rights to the SAF once it is officially issued by the Marshall Islands government. The journey to create the SAF began in 2018, amidst initial skepticism from central governments regarding the adoption of cryptocurrencies. However, Dittus pointed out that attitudes towards digital currencies have evolved over time, with many central banks now exploring the idea of central bank digital currencies (CBDCs). For instance, China has made significant progress in developing its own CBDC. This shift in perception reflects a growing acceptance of digital currencies in official circles. Sub-Saharan Africa has shown a strong embrace of mobile banking, setting the stage for the region to potentially adopt virtual currencies like the SAF. Dittus expressed admiration for Africa's mobile phone usage and highlighted the blockchain technology's transparency, cost-efficiency, and potential to mitigate hyperinflation risks in certain countries. Additionally, blockchain technology could streamline cross-border remittances at lower costs, benefiting the region's economy. The SAF will function as the official currency of the Marshall Islands, issued on the blockchain rather than by a central bank. To ensure compliance and prevent misuse, users must undergo a stringent KYC (know your customer) process before using the currency. This process builds trust in the currency and the overall ecosystem. Looking ahead, Dittus sees potential for digital currencies, like the SAF, in smaller countries or those seeking alternatives to traditional banking systems. He highlighted China's progress in this space, suggesting that China could introduce a digital currency for use within its Belt and Road Initiative. This move could enhance financial flows in the region and reduce dependence on existing financial systems, offering a compelling proposition for countries looking to diversify their financial infrastructure.