Palau's Ripple-Powered Stablecoin Completes Successful Initial Phase; Aims for National Adoption
Summary:
The Republic of Palau's Ministry of Finance announced the successful completion of the first phase of the Palau Stablecoin (PSC) Program. The national stablecoin, which is pegged to the U.S. dollar, was launched using the Ripple-powered XRP Ledger platform. Positive experiences were reported by both volunteers who used the currency and the local retailers who accepted it. The stablecoin initiative aims to reduce transaction costs, decrease carbon emissions related to finance, and provide greater financial inclusion by not requiring a bank account. The next stages of the project will focus on education and addressing legal and regulatory issues.
The Republic of Palau's Ministry of Finance has announced the successful completion of the initial stage of the Palau Stablecoin (PSC) Program. Plans are underway for further development of its national stablecoin, which is pegged to the U.S. dollar, with an objective of a broader adoption, as revealed in a report on December 7. The Ripple-powered, three-month PSC initiative involved 168 voluntary government workers, who had the chance to utilize 100 PSC at select local businesses. Both the volunteers and the store owners gave positive feedback about their usage of the PSC.
Transactions were carried out via a smartphone using a QR code or by manually entering a wallet address. The capability to exchange the PSC for U.S. dollars, which is the official currency of Palau, was exclusive to the retailers. The PSC was fully backed by $20,000 in a Tier 1 U.S. bank insured by the Federal Deposit Insurance Corporation (FDIC).
The PSC's potential benefits according to the study include reduced transaction costs, lower carbon emissions related to the country’s financial system, and broad-based financial inclusion as it doesn't require a bank account. This is particularly relevant since not all islands of Palau have banking services. The report conveyed Palau’s determination in fostering digital innovation and financial modernization through its Stablecoin program.
The program's forthcoming stages will target educational efforts and addressing legal and regulatory issues. Users expressed interest in future use cases encompassing peer-to-peer transfers and remittances. Ripple has been a key partner in Palau's digital currency exploration since 2021 when the country, home to approximately 18,000 inhabitants, began this journey. The PSC initiative, which commenced in July and concluded in September, also incorporated a digital identification program facilitated by Binance. Ripple launched its CBDC Platform in May.
Published At
12/9/2023 12:20:00 AM
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