The Ministry of Finance of Palau officially rolled out the second phase of its Palau Stablecoin (PSC) program on December 15, 2023. This development was confirmed by Jay Hunter Anson, a cybersecurity consultant in Palau and an adviser to the Ministry of Finance. The announcement was made via a post on social media.
In the second phase, Palau aims to strengthen its collaboration with Ripple, a prominent player in the blockchain and digital currency space. The goal is to leverage Ripple’s central bank digital currency (CBDC) platform and tap into its technical expertise. PSC, a digital currency pegged to the United States dollar, operates on Ripple’s XRP Ledger.
Palau Focus on Collaborations and Sustainable Development
Anson outlined that the primary focus of the second phase of the PSC pilot program is to establish new collaborations for marketing and sustainable development goals. The program aims to prioritize the development of a digital ecosystem, enhance user engagement, and ensure adherence to regulatory compliance.
Providing insights into the advantages of blockchain-based digital currency, Anthony Welfare, CBDC strategic adviser at Ripple, emphasized benefits such as reduced transaction fees and addressing the environmental impact of money circulation. However, he acknowledged challenges, including the complexity of moving traditional currencies across Palau’s 340 islands and the high costs of mobile data in the country.
Welfare highlighted that Palau residents can conduct offline transactions using PSC, even during power outages. This feature adds resilience to the digital currency system and addresses potential challenges faced by users in the region.
Successful Completion of Phase One
The Ministry of Finance previously announced the success of the first phase of the PSC program on December 7. This three-month phase involved 168 volunteers from government employees who received 100 PSC each.
Participants utilized the digital currency at local retailers participating in the program, making payments through mobile phones via QR code scanning. Positive feedback was received from both retailers and volunteers, setting a promising precedent for the ongoing development of the Palau Stablecoin.