Ripple, a digital payment network, has partnered with the Republic of Palau to develop its digital currency. The payment network still aims to dominate the global payment industry despite the problems in the US.
The country does not have its own Fiat currency or central bank similar to El Salvador. Its legal tender is, instead, the US dollar backed with Ripple. The Central Bank will focus on developing USD-based digital currency such as a stable coin instead of digital currency (CBDC). This currency would subsequently help to facilitate cross-border payments for the country.
The partnership will focus on developing strategies for cross-border payments, according to a statement issued on Tuesday by Ripple. The implementation of this plan will give Palau the world’s first government-backed national stable coin.
Ripple, who has experience in designing global payment systems, plans to improvise the National Stablecoin in the first half of 2022. It also provides technical, business, design, and policy support to Palau.
Surangel Whipps Jr Palau’s President expressed his happiness about this partnership with Ripple that will also promote economic innovation and technology in the country. He also recognized the potential of blockchain technology in transforming the country’s economy.
“The first phase of the partnership will focus on a cross border payment strategy and explore options for creating a national digital currency that will provide more financial access to Palau citizens.”
Palau has opted to create its own digital currency in the XRP Ledger (XRPL) instead of the Central Bank Digital Currencies (CBDCs). An additional advantage is that it is 120,000 times more energy-efficient and also carbon-neutral when compared to proof-of-work blockchains platforms. Furthermore, the XRPL offers other features such as scalability, speed, and low cost.
To this James Wallis, the VP of Central Bank Engagement at Ripple said;
“We are excited to work with Palau to achieve our economic and climate goals, we have a great opportunity to integrate our technology and experience with the unique features of Palau to make a real economic and social impact on the country.”
This partnership turns out to be ideal for both Ripple and Palau because both parties have concerns about the climate and the environment.
Reportedly, EW Zero is a tool co-created by Ripple to ensure stability in the blockchain industry. This tool was first used by the XRP Ledger Foundation.
The company has also reached a partnership with the only carbon-negative country in the world Bhutan to develop its CDBC.