- The partnership aims to create a USD-pegged digital currency
The deal also involves construction of cross-border payment channels
Palau doesn't want to make XRP digital tender
Ripple has partnered with the Republic of Palau for the implementation of the world's first government-backed national stablecoin. The XRP ledger will collaborate with authorities to design the first digital currency of the nation, Ripple said in a statement.
The press release stated that the firm will work on designing a USD-backed stablecoin that will help create other services such as corporate registries. Currently, Palau relies on the U.S. dollar and doesn’t have its own currency. The country hopes that the stablecoin will provide it a viable alternative to central bank digital currencies (CBDCs).
Although currently XRP is facing with huge volatility, the firm aims to increase its presence all over the world.
“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,” Surangel S. Whipps Jr., President of Palau, said.
Ripple will also help the country in improving and developing cross-border remittance channels, providing technical, design and policy support for the cross-border payment infrastructure.
Palau partnered with Ripple to implement this change as the XRP ledger is carbon neutral, being more than 61,000x more energy-efficient than Bitcoin.
Also, the ledger provides increased scalability, speed and low cost for confirming transactions.
"We are excited to be working with Palau to achieve its financial and climate-related goals,” James Wallis, VP of Central Bank Engagements at Ripple, said.
Ripple is a crypto currency rival to the likes of bitcoin and ethereum -- but regulators are turning the screw Photo: AFP / INA FASSBENDER