Palau Launches US Dollar-Backed Stablecoin on XRP Ledger

The Republic of Palau and Ripple announced yesterday that they are launching a U.S. Dollar-backed Palau Stablecoin (PSC), issued on the carbon-neutral XRP Ledger (XRPL).

The partnership between Ripple and Palau was first announced back in 2021.

The pilot program, to be rolled out in phases, will initially involve about 200 government employees and local merchants in Palau. This controlled stablecoin pilot will leverage Ripple’s CBDC Platform, offering a comprehensive solution for central banks to issue their own digital currencies.

The operational model will follow the footsteps of other reserve-backed private stablecoins like USDC or USDT, but with a significant distinction – the direct involvement of the Republic of Palau’s Ministry of Finance (MOF). The MOF will oversee the system, ensuring the 1:1 reserve guarantee for each PSC.

President of the Republic of Palau, Surangel S. Whipps, Jr., expressed his vision for a digitized economy, empowering citizens through greater financial inclusion and streamlined government processes. Palau’s nimbleness as a smaller nation enables the swift launch of the stablecoin, a feat made possible with Ripple’s expertise in CBDCs and blockchain technology.

James Wallis, VP of Central Bank Engagements for Ripple, commended the collaboration with Palau and emphasized the significance of this initiative in reducing the island’s carbon footprint and mitigating the impact of climate change.

See Also

Ripple Pushes Back Against SEC in Ongoing Legal Battle

During the initial phase of the pilot, government employees participating in the program will receive an allotment of PSC to facilitate transactions.

The success of Phase One of the controlled pilot program will be measured based on specific criteria, ensuring secure and reliable minting, distribution, and redemption of PSC by the Palau Ministry of Finance (MOF). Government employees will use PSC for purchases at select retailers, while the retailers can safely verify and convert PSC payments to their local bank accounts.

Read more about Ripple, the XRP Ledger, and CBDCs:

• Bhutan to use Ripple’s Private XRPL for CBDC
• Columbia’s first blockchain land registry launched on XRP Ledger
• Ripple’s CBDC Innovate 2023 Challenge Attracts 700 Registrations
• CBDC Latest: Colombia to Test Ripple CBDC Platform; BIS and Bank of England Complete Pilot
• Central Bank of Montenegro partners with Ripple to develop its first digital currency