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September 27, 2023

IMF Highlights Climate Change and DAOs as Major Threats to the Marshall Islands

The International Monetary Fund has identified climate change and decentralized autonomous organizations (DAOs) as major threats to the Marshall Islands in its World Economic Outlook. The Marshall Islands is an independent country in the South Pacific Ocean and is highly vulnerable to climate change-related disasters due to its low-lying nature. The nation is particularly exposed to rising sea levels, the increase in the intensity of storms and the frequency and intensity of cyclones. Furthermore, the Marshallese economy is largely dependent on tourism and fisheries, both of which are under threat from climate change. In addition to climate change, the IMF also highlighted the potential risks posed by DAOs. These secure digital financial organizations have become increasingly popular among blockchain enthusiasts and can be used for issuing digital assets. The digital assets may be designed to mimic traditional shares and investments, but because the DAOs are uncomplicated and untraceable, they can be used to launder money, finance terrorism and other illegal activities. The IMF notes that the Marshallese authorities are in the process of developing a framework for oversight of DAOs in an effort to limit their potential risks.