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by pltm
(PLTM) - A press release boasting that the BVI now has its own cryptocurrency is being interpreted around the world as an announcement that the Territory now has a second currency and is planning to eventually replace the United States Dollar.
The announcement about the Territory’s cryptocurrency, which is called BVI~LIFE was made by LIFElabs.io which is a company that Government ventured into a partnership with in April this year.
In that well circulated press release dated December 3, LIFElabs mentioned the recent Digital Economy Symposium that and announced that details about the cryptocurrency was rolled out there.
The release said, “As part of an on-going initiative to grow the Financial Technology sector, the British Virgin Islands is hosting its BVI Digital Economy symposium on December 3rd. The event will connect over 100 stakeholders across private and public sectors such as Price Waterhouse Coopers in the archipelago’s transition to a digital leader. As part of the event, BVI partner LIFElabs.io will present details of the planned digital currency rollout.”
The company then ventured into explaining how the new cryptocurrency was going to be used in the BVI by residents and tourist. According to LIFElabs, BVI~LIFE would be used for transactions, and will have the same value as the US dollar.
LIFElab.io said, “Since 1959, BVI has relied on the United States Dollar as its national currency for business and consumption. In partnership with LIFElabs.io, the government is looking to implement a central digital currency powered by LIFEtoken pegged 1:1 against the United States Dollar for use within the territory. It is expected that this transition will reduce transactional fees, increase transaction speed, and be accessible to BVIslanders and tourists alike.”
However, this very statement has been interpreted in multiple international reports as an announcement that BVI~LIFE is the Territory’s new second currency, and that it is a possible replacement of the dollar.
In its reporting the cryptopolitan.com, a site dedicated to Crypto and Blockchain News, it was stated, “In the past 60 years, the British Virgin Islands has used the US dollar as its national currency, and now it wants to evolve beyond. The region is planning to replace the US dollar with their digital currency. The asset will be pegged to the US dollar with each coin/token representing one US dollar.”
Meanwhile international news company Bloomberg in its report on the announcement stated that the BVI was following Marshall Islands. The Bloomberg writeup stated, “The British Overseas Territory, which consists of more than 50 Caribbean islands, has relied on the U.S. dollar since 1959. But it’s planning to create a token pegged one-to-one to the greenback for use within its territory. In creating its own coin, it’s following countries such as the Marshall Islands.”
The mention of the Marshall Islands in this instance relates to the fact that the Republic of the Marshall Islands (RMI), which is a country that is similar to the BVI, in that it has multiple islands and uses the US dollars as its currency, was cautioned by the International Monetary Fund (IMF) when the news of its cryptocurrency plans were revealed.
It was a situation where the Marshall Islands announced that it was going to be using its cryptocurrency (“SOVEREIGN” or “SOV”), and the IMF decided to write a Selected Issues paper on 10 August, 2018 advising that the plan was not the best.
In the report the IMF announced to the Republic of the Marshall Islands, “The issuance of the SOV would put the RMI into largely uncharted territory for financial regulation and monetary policy. The SOV Act was passed at a time when there is little certainty regarding the best regulatory approach to virtual currencies/crypto assets.”
The International Organization also warned that country about having a second currency stating, “The SOV is also intended to be the RMI’s second legal tender, thereby raising problems of macroeconomic management under a dual currency system.”
Back in April when the BVI Government announced its partnership with LIFElab it was explained that Government was collaborating with the company “for the purposes of providing Rapid Cash Response in the event of an emergency, and also creating an alternative digital currency payment method for facilitating ongoing financial transactions across the network of islands.”
It was further explained that the agreement entailed the creation of a wallet app that “can be used for peer-to-peer (P2P) transactions, or in daily commerce, purchasing essential goods and services from local businesses.” Further it was explained that in the case of a disaster this arrangement would allow people from across the world to donate directly to the BVI/LIFE Rapid Response Cash Fund.
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