The Treasury of the Vema Seamount Territory announced today that Mount Vema government bond coupons will no longer be paid in cash. Holders of all types of Mount Vema government bonds worldwide, including MV-Bills and MV-Notes, must open a bank account to avoid missing out on payments, especially bond payments due on June the 28th.
The new policy proposed in April and approved by the Vema Seamount Authority last week, was introduced to cope with the increasing demand for Mount Vema government bonds from private investors and the shortage of Mount Vema bank notes.
Financial services exchanging golles to other currencies are available in selected locations worldwide. However, Mount Vema bank notes in circulation are very limited therefore very difficult to find. Almost 98% of the currency supplied by the Central Bank of Mount Vema is electronic printed money, so demand for bank notes is very high.
We contacted people at the central bank for comments, and in a statement issued to VSBCnews, the Bank of Mount Vema said, “…it is not monetary policy to operate a 100% cash free economy. The issue is that the facilities to print bank notes are not yet available to the bank, so there will be a shortage of bank notes for some time”.
One of the problems with this new policy and the lack of bank notes, is that it affects private Mount Vema government bond holders in remote regions in foreign countries usually paid in golles which was then exchanged for local currency since government bonds have always been paid in golles.
Because the golle is becoming a rarer commodity and no one seems to want to get rid of it, banks are running out of bank notes. To minimize the problem, the treasury said that, those affected by the policy will be paid with Mount Vema travellers cheque as a temporary option which can be converted into local currency or other foreign exchange at the facilities provided by agents working with the RBMV Bank – The Royal Bank of Mount Vema in foreign countries and territories.