To expand its CBDC capabilities, Ripple, a leading blockchain firm, has collaborated with Palau, a country in the Pacific Islands, to explore its potential for stablecoin usage. The project will involve a limited digital currency [U.S. dollar-backed Palau Stablecoin, PSC] and will operate on the XRP ledger, as confirmed by Jay Hunter Anson, a member of the Ministry of Finance’s board of directors.
Moreover, the Republic of Palau’s Ministry of Finance [MOF] will supervise the system and trigger the issuance and redemption of stablecoin units, while always guaranteeing the 1:1 reserve, the press release stated. Initiated in March with wallet design, the nation’s first stablecoin was minted in July and will run through August, Anson said, with Ripple providing technical assistance and personnel.
About 200 government officials and regional business owners in Palau will participate in the initial phase of the pilot program, which will be implemented in stages.
As part of this controlled stablecoin pilot, the tiny oceanic nation will also leverage the Ripple CBDC platform, an end-to-end solution for central banks to issue their central bank digital currency, as well as the technical resources to make the PSC, a digital representation of Palau’s official currency, the U.S. Dollar.
Ripple’s XRPL Is A Carbon-Neutral Blockchain
The reason for choosing the XRP ledger was that it is a carbon-neutral blockchain that has been used to transact millions of transactions over the past 10 years while enabling privacy and security for the settlement and liquidity of tokenized assets. Speaking on the collaboration, President of the Republic of Palau, Surangel S. Whipps, Jr., stated:
By digitizing our currency, we hope to mobilize our economy and government processes to improve financial transactions and empower our citizens. As a smaller country, Palau has the advantage to be innovative and nimble in releasing our stablecoin.
“We trust in Ripple’s long-standing expertise in CBDCs and blockchain technology, as well as the carbon-neutral XRP Ledger to help create our national digital currency that will offer our citizens greater financial success,” the President added.
The San Francisco-based payment firm has been engaging with Central Banks around the world to better understand their goals and assess how the CBDC private ledger can help achieve them. Besides Palau, the firm has also initiated pilot programs with the Royal Monetary Authority [RMA] of Bhutan.