The Pacific island nation of Palau has partnered with San Francisco-based blockchain payments company Ripple on a U.S. dollar-backed digital currency for the country — the world’s first government-based national stablecoin — using the XRP Ledger, according to a Ripple announcement.
Fast facts
- Ripple will provide Palau with technical, business, design and policy support for Palau’s national stablecoin. “Palau chose Ripple because of its extensive experience in blockchain and building global payment systems, and the XRP Ledger because it’s carbon-neutral and 120,000x more energy-efficient than proof-of-work blockchains,” said Ripple in its announcement.
- “As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple,” said Surangel S. Whipps Jr., president of 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.”
- A U.S. dollar-backed stablecoin and related use cases — such as a corporate registry — on the XRP Ledger could be an alternative to central bank digital currencies (CBDCs), Ripple said.
- Palau, a group of over 300 islands in the Micronesia region of the western Pacific Ocean, is renowned for its beautiful island scenery. The country has a population of 22,000 and GDP of US$268 million, according to World Bank data.
- Ripple’s latest partnership with Palau comes amid its legal troubles in the United States where it is deeply embroiled in a lawsuit with the U.S. Securities and Exchange Commission over an alleged unregistered securities offering of XRP worth over US$1.38 billion. Following the lawsuit, which saw U.S.-based cryptocurrency exchanges and partners such as MoneyGram suspend XRP trading and cease their partnerships, the company has expanded its business for the XRP Ledger technology not just outside the U.S. but also beyond digital payments and remittances to central bank digital currencies (CBDCs) including with Bhutan, tokenization, decentralized finance (DeFi) and NFTs.
- XRP, the native token of the XRP Ledger, is currently ranked the seventh-largest cryptocurrency with a market value of US$49 billion, according to CoinGecko data.
See related article: Ripple to launch ‘game-changer’ liquidity hub amid XRP legal battles with SEC
