Underbanked and Foreign Reserve Deficient: Is Cryptocurrency the Strategic Panacea for Small South Pacific Nations?

Abstract

A number of small South Pacific nations suffer from a lack of robust international banking relationships and a shortage of foreign reserves. The Republic of the Marshall Islands decided a solution to these problems was to create a sovereign cryptocurrency for the country. Other small nations in the region are attempting to follow the Marshall Islands and create their own cryptocurrencies. This case explores the opportunities and threats of such a bold financial experiment and raises questions concerning the future of sovereign cryptocurrency in the region and beyond.