Republic Of Palau Partners With Ripple For A USD-Backed Stablecoin
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The Republic of Palau has announced a partnership deal with Ripple for the pilot of the USD-backed Palau stablecoin. This stablecoin will be issued on XRP Ledger, with the goal being to foster privacy and security in settlements and liquidity of tokenized digital assets.
The Republic of Palau partners with Ripple for a USD-backed stablecoin
According to the announcement, Palau will use the Ripple CBDC Platform for this initiative. The platform offers an end-to-end solution that allows central banks to issue central bank digital currencies (CBDCs). The Ripple CBDC platform will create PSC in a digital representation of the Palau official currency, which is the US dollar.
Palau will be able to manage and customize the life cycle of this stablecoin, including processes such as transactions and distribution. Every PSC will be valued at one USD and guaranteed by a 1:1 reserve in fiat currency and issued on XRP Ledger.
The stablecoin’s model follows a similar operational model as other reserve-backed private stablecoins like USD Coin (USDC) and Tether (USDT). The Ministry of Finance for the Republic of Palau will be involved in this stablecoin, with it being in charge of supervising the system and enabling the issuance and redemption of stablecoin units.
Empowering citizens to access financial services
The President of the Republic of Palau, Surangel S. Whipps Jr, said that digitizing the currency was a major step towards mobilizing the economy and government processes to boost financial transactions and empower citizens. Palau was also innovative and focused on releasing the stablecoin.
“We trust in Ripple’s long-standing expertise in CBDCs and blockchain technology, as well as carbon-neutral XRP Ledger to help create our national digital currency that will offer our citizens greater financial success,” the president said.
The VP of Central Bank Engagements for Ripple, James Wallis, noted that the blockchain company was pleased to be working with the Republic of Palau for this initiative. Wallis also said that Palau would be tasked with boosting business growth by offering a single source to produce and manage digital currencies. He also said that the stablecoin would allow Palau to lower its carbon footprint and vulnerability to the effects of climate change.
During the first phase of this pilot program, the government employees at Palau that volunteered for this program will obtain a PSC allotment that will be used during the pilot phase.
The Palau stablecoin is expected to offer a wide range of benefits to citizens, merchants, and the government. The stablecoin will foster financial inclusion and reduce the transaction fee for citizens. It will also lower currency costs while increasing the speed at which transactions are processed.
The press release noted that the PSC would be a secure and effective monetary tool that would be used to support commercial activity across Palau. The success criteria for the first phase of this controlled pilot phase will present a wide range of factors, such as a secure and reliable mint. It will also enable the purchase of goods and services and ease the payment process.
