- The Republic of Palau, which is located in the western Pacific, has confirmed that it will work with the blockchain cross-border payments company Ripple as part of a push to create a central bank digital currency (CBDC).
- The new cryptocurrency will be a government-backed stablecoin that has US dollar associations – making Palau the first nation in the world to successfully pull off a government-backed stablecoin.
- “We have a wonderful opportunity to bring together our technology and experience with the unique characteristics of Palau to make a real economic and social impact for the country,” said a spokesperson for Ripple.
The Republic of Palau, a country in the western Pacific, has paired up with one of the world’s leading blockchain cross-border payments firms.
Palau will work alongside Ripple as part of the new partnership, which will see the country develop its own central bank digital currency.
‘Central bank digital currency’ (CBDC) is a term used to describe a virtual version of a central bank-issued ‘traditional’ currency.
In the case of this partnership, the two organisations won’t just create a simple CBDC; instead, they will create one that is backed by government support – this is known as a ‘stablecoin’.
In Palau’s case, the currency in question used to support the coin will be the US dollar.
It is expected that the new move will launch in 2022, press reports indicated.
If it works out, Palau is likely to be the first country in the world to successfully bring a government-backed stablecoin to fruition.
In a statement, a senior figure at Ripple said that the firm was pleased to be working with Palau with a series of multiple aims in place.
James Wallis, who is vice president of Central Bank Engagements at Ripple, also explained that there would be some benefits for Ripple in regard to climate change.
“We are excited to be working with Palau to achieve its financial and climate-related goals,” he explained.
He went on to say that the opportunity to collaborate could bring about significant impact.
“We have a wonderful opportunity to bring together our technology and experience with the unique characteristics of Palau to make a real economic and social impact for the country,” he said.
Palau’s President Surangel Whipps Jr. said that the country had made a firm commitment to helping innovate when it comes to finance.
“As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple.
“The first phase of the partnership will focus on a cross-border payments strategy and exploring options to create a national digital currency, providing the citizens of Palau with greater financial access,” he added in his remarks to the press.
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