Recent history has not been kind to the Marshall Islands. Located in the middle of the Pacific Ocean between the Philippines and Hawaii, the country was caught between Japanese and US forces in the Second World War. The US military subsequently used the country as a nuclear testing site in the decades after the conflict, leaving a legacy of radioactive contamination. The threats facing the Marshall Islands have not abated, even though military activity has waned; today, climate change represents an existential peril for an island state with an average elevation of just two metres above sea level.
To compound this situation, the retreat of correspondent banks from servicing small and remote countries has left the Marshall Islands at risk of losing access to the global financial system. A lone domestic lender has one such relationship left to cater to a dollarised economy with no currency of its own. But as these worries and others weigh on the country’s future, the government is turning to digital finance in the search for solutions. To this end, the Marshall Islands is at the vanguard of efforts to issue the world’s first national digital currency.
