The Philippine Sea archipelago of Palau, which consists of more than 300 islands, has announced a partnership with Ripple to launch a limited pilot of its stablecoin. The stablecoin will be pegged to the value of the US dollar and uses XRP technology as its platform.
The Palau stablecoin project, led by Jay Hunter Anson, a member of the Ministry of Finance's board of directors, successfully started trials in March. For three weeks running, the project has succeeded in distributing the Palau Stablecoin (PSC) to the market.
“We have been distributing PSC (Palau Stablecoin) for three weeks. Today is our first official press release,” said Hunter Anson in a tweet post.
On July 13, Hunter Anson became the first person to use the Palau Stablecoin (PSC), also known as “kluk”, to purchase a Micronesian breakfast from a collaborating vendor. On this occasion, he explained that PSC is a prototype for digitizing the US dollar which is being developed in partnership with Ripple using XRPL blockchain technology. If the project is successful, the trial has the potential to revolutionize the way Palauans pay for goods and services in the future.
During the PSC pilot program, a number of government employees and local traders in Palau volunteered to participate in using this stablecoin. Several prominent merchants, such as Surrangel and Sons, The Penthouse Hotel, and King's Minute Mart, have accepted PSCs as a form of payment during the trial period. However, the Palau government does not provide guarantees regarding the continuation of the project after the trial phase ends.
“We will send a report to the president and congress with recommendations on whether stablecoins are a good program for Palau or not. "The next steps after that will depend on what government authorities allow," said Hunter Anson.
Previously, Palau had entered into a partnership with Cryptic Labs, a blockchain research company. The two parties are reportedly involved in a digital residency program which is the first in the world.
In this innovative program, Palau residents have the opportunity to apply for and obtain an NFT representing their identity card. These NFTs provide special access to various Palau-based facilities, including delivery services and physical addresses.
"By digitizing our currency, we hope to mobilize our economic and government processes to improve financial transactions and empower our citizens. As a smaller country, Palau has the advantage of being innovative and nimble in releasing our stablecoin," said the President of the Republic of Palau , Surangel S. Whipps Jr. in response to its CBDC concerns.