Palau, a country made up of 340 islands in the Pacific Ocean, is currently running a trial of a stablecoin linked to the US dollar, according to Jay Hunter Anson, a board member of the Ministry of Finance. The project began in March with wallet design, and the first stablecoin was minted in July and will run through August. The stablecoin is based on Ripple’s XRP ledger, and Ripple has been providing technical assistance and personnel. Anson tweeted, We’ve been distributing PSC (Palau Stablecoin) for three weeks. Today is our first official press release. A further announcement is due on Thursday.
The nation of 20,000 people does not have a central bank and uses the US dollar as its currency, and there is no guarantee that the project will continue once the trial is over. Anson told journalists, We will send a report to the president and congress with recommendations whether or not the stablecoin is a good program for Palau. Next steps after that will depend on what the government authorities authorize.
Palau has also partnered with blockchain research firm Cryptic Labs to launch the world’s first digital residency program, and those who apply will receive a non-fungible token (NFT) representing their resident ID cards. This will give them access to Palau-based perks such as shipping services and a physical address. The country is also working on establishing a crypto exchange, according to Palau President Surangel S. Whipps, Jr. in a January interview.
Other Pacific nations have also been exploring crypto technology. Last year, Tonga said it wants to make bitcoin legal tender in the country, and in 2018, the Republic of the Marshall Islands said it planned on issuing its own digital currency.