Marshall Islands

The regulatory status of cryptocurrency in the Republic of the Marshall Islands (RMI) is best characterized as a 'Gray-Zone'. While the act of buying, selling, and holding cryptocurrency is not criminalized for individual retail users, the domestic infrastructure to support these activities is legally paralyzed. The government passed the Banking (Amendment) Act in 2020, which formally brought Virtual Asset Service Providers (VASPs) under the supervision of the Banking Commission. However, reports from late 2025 indicate that no VASP licenses have been issued, effectively making the operation of a local exchange illegal despite the existence of a licensing framework. This forces all retail trading activity onto offshore platforms.

The country's approach to crypto has been dominated by its ambitious but failed attempt to launch a national sovereign cryptocurrency, the 'SOV'. Enacted in 2018, the Sovereign Currency Act sought to make the SOV legal tender alongside the US Dollar. This move drew sharp rebukes from the International Monetary Fund (IMF) and the US Treasury, who warned that it jeopardized the RMI's last remaining correspondent banking relationship (CBR). After years of delay and diplomatic friction, the RMI government capitulated in August 2025, passing the Monetary Authority Act which explicitly repealed the Sovereign Currency Act, effectively ending the state-backed crypto project.

Despite the failure of the SOV, the Marshall Islands has successfully carved out a niche as a corporate haven for Decentralized Autonomous Organizations (DAOs). The Decentralized Autonomous Organizations Act of 2022 (amended in 2023) allows DAOs to register as Limited Liability Companies (DAO LLCs). This legislation is unique globally as it recognizes the decentralized nature of these entities while providing them with legal personhood. This has led to a surge in DAO registrations, even as the domestic retail trading environment remains stagnant.

For the average retail investor, the environment is one of 'tolerance without support'. There are no government-endorsed avenues to purchase crypto, and local banks are highly hesitant to process crypto-related transactions due to the fragility of their US dollar clearing channels. The regulatory focus has shifted entirely to AML/CFT compliance to satisfy international watchdogs like the FATF, rather than fostering a local retail crypto market. Consequently, while trading is legal, it is operationally difficult and relies entirely on the accessibility of foreign service providers.