- The partnership aims to create a USD-pegged digital currency
- The deal also involves construction of cross-border payment channels
- Palau doesn’t want to make XRP digital tender
Ripple has partnered with the Republic of Palau for the implementation of the world’s first government-backed national stablecoin. The XRP ledger will collaborate with authorities to design the first digital currency of the nation, Ripple said in a statement.
The press release stated that the firm will work on designing a USD-backed stablecoin that will help create other services such as corporate registries. Currently, Palau relies on the U.S. dollar and doesn’t have its own currency. The country hopes that the stablecoin will provide it a viable alternative to central bank digital currencies (CBDCs).
Although currently XRP is facing with huge volatility, the firm aims to increase its presence all over the world.
Palau is not interested in adopting Ripple as a digital tender like El Salvador but believe that blockchain technology can work wonders to improve the economic stability of the nation.
“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,” Surangel S. Whipps Jr., President of Palau, said.
Ripple will also help the country in improving and developing cross-border remittance channels, providing technical, design and policy support for the cross-border payment infrastructure.
Also, the ledger provides increased scalability, speed and low cost for confirming transactions.
“We are excited to be working with Palau to achieve its financial and climate-related goals,” James Wallis, VP of Central Bank Engagements at Ripple, said.