Ripple and the Republic of Palau partner to create a digital currency
One country is looking at Ripple as the best option to develop a domestic currency based precisely on U.S. dollars: Palau.
According to a press release shared by Ripple, Palau chose the XRP Ledger to create digital dollars to circulate internally in the country. The idea, Ripple explains, is to design a USD-backed stable coin around which could be developed other services like corporate registries.
Palau does not have a fiat currency of its own. Like El Salvador, citizens use the U.S. dollar as legal tender. However, the small island located in Oceania does not want to adopt XRP or any cryptocurrency as legal tender but hopes to issue a government-managed digital version of the U.S. dollar.
In this sense, Palau’s initiative looks more like the issuance of a stable coin than a CBDC. And it makes a lot of sense, given that Palau does not have a central bank.
Palau’s president Surangel S. Whipps Jr was confident that Ripple could provide the technology necessary to develop a financial product tailored to Palau’s needs.
“As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple. 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.”
The note shared by Ripple explains that the XRP Ledger would give Palau the ability to fully settle transactions in less than 5 seconds at a cost that doesn’t even reach a penny on the dollar per transaction.
