An isolated island nation in the Pacific Ocean with a population of about 75,000 continues to break ground in the cryptocurrency space.

The Marshall Islands is proceeding with the creation of a blockchain-based national currency, the Marshallese sovereign or SOV, the country said in a statement. David Paul, the environment minister and minister-in-assistance to the president of the Republic of the Marshall Islands, spoke about the venture at a conference in Singapore on Wednesday.

“With the blockchain technology in place, we thought this was an opportune time to establish our own legal tender” and lessen the nation’s dependence on...