Palau Runs Trial of Stablecoin Linked to U.S. Dollar

A stablecoin tied to the dollar is now being tested in Palau, an archipelago of 340 islands in the Pacific Ocean. The project started in March with the creation of a wallet, and the first stablecoin was issued in July and ran through August. The initiative has received technical help and staff from Ripple, a well-known blockchain business, as Palau works with the company to investigate digital currency options.

The stablecoin will function on Ripple’s XRP ledger, according to a direct message from Jay Hunter Anson, a board member of Palau’s Ministry of Finance, to CoinDesk.

Future Plans and Expanding Crypto Initiatives

There is no assurance that Palau will continue with the stablecoin project when the trial is over, despite it being ongoing. The country, which doesn’t have a central bank and utilizes the dollar as its unit of exchange, will review the trial’s findings and send a report to the president and congress with suggestions for the future. The approval of government authorities will be required in order to move forward with the stablecoin.

Palau has made investments in various crypto technologies aside from the stablecoin effort. The nation unveiled the first digital residency program in the world in partnership with blockchain research company Cryptic Labs. Participants in the initiative receive a non-fungible token (NFT) that resembles their resident identification cards, giving them access to benefits offered only in Palau, such as shipping and a physical address.

Additionally, in a January interview with CoinDesk, Palau President Surangel S. Whipps, Jr. disclosed intentions for launching a cryptocurrency exchange, highlighting the nation’s continued attempts to investigate and accept blockchain and digital currency developments.

Palau’s participation in the stablecoin experiment and other crypto projects show the nation’s readiness to research and use blockchain technology to reshape its financial system. Palau’s economy and level of financial inclusion might potentially be expanded if the stablecoin and digital residency programs are implemented successfully.