Ripple, a provider of enterprise blockchain and crypto solutions for cross-border payments, has partnered with the Pacific island nation of Palau to explore the country’s first national digital currency and its use cases with the XRP Ledger (XRPL).
The partnership will initially focus on developing strategies for cross-border payments and a US dollar-backed digital currency for Palau, and could see the implementation of the world’s first government-backed national stablecoin in the first half of 2022 for which Ripple would provide Palau with technical, business, design and policy support.
Meanwhile, exploring a US dollar-backed stablecoin and associated use cases – such as a corporate registry – on the XRP Ledger could provide a viable alternative to central bank digital currencies for countries like Palau.
“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,” says Palau President Surangel Whipps, Jr.
Palau chose Ripple because of its experience in blockchain and building global payment systems, and the XRPL because it’s carbon neutral and 120,000 times more energy-efficient than proof-of-work blockchains, according to the company.
The XRPL provides financial institutions and government bodies, such as Palau, with the ability to fully settle transactions for fractions of a penny and in just three to five seconds. To date, more than 5,400 currencies have been issued and traded on the XRPL.
Ripple’s vice-president of central bank engagements James Wallis points out: “We have a wonderful opportunity to bring together our technology and experience with the unique characteristics of Palau to make a real economic and social impact for the country.”