According to blockchain smart card wallet developer Tangem, the Republic of the Marshall Islands (RMI) has tasked it with issuing physical banknotes for its upcoming official state digital currency, the Sovereign.
The physical banknotes, however, will not be made of cotton or paper, as fiat notes typically are. Instead, they will take the form of a smart card with a chip and NFC antenna. According to the Tangem website, these cards, which were first developed by Tangem in 2017, are essentially a "hardware cold wallet that is fixed to a certain cryptocurrency and can hold one private key at a time."
Tangem's announcement yesterday states that issuing physical representations of digital currency will allow for greater adoption of the Sovereign:
"Thanks to the immediate transaction validation, zero fees and no Internet connection requirements for the end users Tangem banknotes will enable the off-chain physical circulation of the SOV among all SOV holders and will not impose the technical infrastructure burden on the RMI."
However, it may not be that easy. According to Tangem's website, its cards can be physically bought at many retail stores around the world and can be physically sold and purchased by anyone at any time, but extracting money off these cards does, in fact, require a smartphone.
In order to actually get the money off the card, Tangem users must open a specific Android smartphone application that prompts them to hold their smart cards up to their phones for "one to two minutes." The entire value of the card is then transferred into an existing cryptocurrency account. Moreover, there is no recovery method for lost or stolen smart cards – depending on how much money is loaded onto it, losing a Tangem would be like losing a $10 bill, or worse yet, a $100 bill.
The establishment of the Sovereign has been contentious, even causing political strife in the country. In March of last year, the government of the Marshall Islands announced its plans to issue the national cryptocurrency. In November of 2018, Hilda Heine, the president of RMI, faced a vote of no confidence for her role in the Sovereign's creation. She survived that vote – barely – and Sovereign development has continued.