The project aims to deliver a viable cross-border payment and US dollar-pegged digital currency strategy for the country
San Francisco-based blockchain solutions provider for cross-border payment businesses Ripple has partnered with Palau on a sovereign virtual currency strategy. The company shared a Tweeter of a blog post confirming the news earlier today. If the project is successful, Palau will have a virtual currency that will likely be the first stable national coin backed by the government.
Initial digital currency deployment plans in the first half of 2022
Palau will leverage Ripple’s technical and business know-how in its plans, as it intends to release the national stable coin before July of next year. The parties are also looking to assess the feasibility of a USD-backed stable coin and its potential use cases on the XRP ledger.
“As part of our commitment to be the leader in innovation and financial technology, we are delighted to partner with Ripple”, The President of Palau, Surangel S. Whipps, Jr. noted. “The first phase of the partnership will focus on a cross-border payments strategy and exploring options to create a national digital currency, providing citizens of Palau with better financial access. “
The ledger, according to Ripple, could provide an alternative to central bank-backed digital currencies for the country, similar to what the UK has been exploring. Palau is one of the countries that does not have its own currency, relying instead on the US dollar. However, it is not seeking to adopt Ripple’s native XRP token or any other crypto coin as legal tender.
Take a carbon neutral approach
Palau, an archipelago of more than 500 islands widely known for its beautiful island landscapes, is raising serious concerns about the impact of digital assets like Bitcoin on the environment. Ripple clarified that its XRP ledger is not only scalable and fast, but also environmentally friendly. The company further added that the general ledger is more efficient than blockchains using the proof of work mechanism.
“Palau chose Ripple because of its vast experience in blockchain and building global payment systems, and XRP Ledger because it is carbon neutral and 120,000 times more energy efficient than proof-of-work blockchains. . “ Ripple noted in a statement.
James Wallis of Ripple highly appreciated the opportunity to work with Palau on the project.
“We are delighted to be working with Palau to achieve its financial and climate goals. We have a wonderful opportunity to combine our technology and our experience with the unique characteristics of Palau to have a real economic and social impact for the country ”, Wallis, who is the central bank’s vice president of commitments at the FinTech company, noted.
Palau is added to the list of countries pursuing blockchain technology, although the island nation of the Micronesia region is forging a somewhat unique path.
The partnership with Ripple comes at a time when the latter is having legal issues with the United States Securities and Exchange Commission. Legal issues have seen the company lose its partnership with peer-to-peer payments and money transfer company MoneyGram. Ripple boss Brad Garlinghouse said in an interview with CNBC yesterday that the case is progressing well, adding that the case will likely be closed by next year.