The Republic of Palau has launched a stablecoin, Palau Stablecoin (PSC) in collaboration with Ripple. The Director of Palau’s Digital Residency Program and a member of Palau’s Ministry of Finance, Jay Hunter Anson made the announcement on Twitter.
According to Anson, the first PSC has already been minted, which Representatives from both the Palau National Treasury and Ripple came together at Palau’s National Capitol in Ngerulmud to celebrate.
Speaking on the importance of the launch, Anson said it was a crucial step in their joint exploration of the stablecoin’s potential use cases within Palau.
“The PSC launch is an important milestone in our collaboration with Ripple as we work together to explore the possibilities of this stablecoin in specific use cases within our country. We have received explicit approval from the Palau Congress, giving the PSC pilot program an official stamp of legitimacy.”
The Republic of Palau has been working on a stablecoin project since December last year, which is a digital currency issued and managed by the Palau Ministry of Finance and fully backed by U.S. dollar cash balances. Users will hold the PSC in a digital wallet and can use it as fiat currency since it is not as volatile as conventional cryptocurrencies.
The government called for volunteers for the pilot of the stablecoin in March this year, in partnership with Ripple Labs. The essence was to explore the feasibility and benefits of the stablecoin – a U.S. dollar-backed digital currency program using the XRP Ledger, and now it is a reality.
PSC to solve financial challenges
The government of Palau started the stablecoin project to address the country’s unique financial challenges. Specifically, PSC will reduce payment cost and increase access to financial services among citizens. This will cover unbanked communities as well as different socio-economic groups.
The stablecoin will run on XRP Ledger (XRPL), and was taken through a carefully designed process to ensure maximum efficiency. According to Anson, the pilot tests shed light on the stability and usability of the Palau Stablecoin before considering its potential public release.
“Our controlled pilot tests have been enlightening, and we are optimistic about the potential impact of the Palau Stablecoin on our nation’s economy,” Anson stated.
Volunteers are already participating in the pilot, with videos showing citizens using the stablecoin for payment at selected vendors who confirmed the promptness of payment.
A big move for Palau
Palau is an island state in Oceania. Because it doesn’t have a functioning central bank, it has till this day depended on the U.S. Dollar as the medium of exchange in the whole country.
However, payments with USD may be more expensive and not as fast or accessible as a stablecoin, hence the need to develop PSC in collaboration with Ripple.
The creation of PSC therefore is a significant achievement for the national stablecoin initiative which the country’s president describes as a “step towards our own central bank digital currency.”
News of implementation of the stablecoin pilot has gotten the attention of the Ripple/XRP community, but a joint official press release on the event by Ripple and the Palau government is to be held on July 27 at 9:00 AM in Ngerulmud, Palau. It’ll be interesting to see how XRP price responds to this development.
