The island country of the Republic of Palau has partnered with San Francisco, US-headquartered crypto solutions provider Ripple to explore the creation of its national digital currency. The partnership will first focus on developing avenues for inter-border payments that could be facilitated by this digital currency that will be backed by the US dollar, if all goes according to the plans. As part of the deal, Ripple will provide tech, business, design, and policy support to Palau. The government of Palau wishes to provide people with an alternate to bank currencies with expanded financial access.
According to the announcement, if Palau gets a national digital currency, the authorities there are open to experimenting with its use cases on decentralised public blockchain called XRP Ledger (XPRL).
Palau is a country with approximately 340 islands, forming the western chain of the Caroline Islands located in the Pacific Ocean. The economy of the country is impacted by remittances — the money sent back home by its diaspora, employed abroad.
Such nations, depending on remittances, get more money from its native people working out if transactions were done using the crypto technology. Since cryptocurrencies are not regulated by any bank, no service fee is charged on cross-border financial transfers.
As a service fee, international money transfer platforms chug down a significant percent of the remittances and transfers a lesser amount than intended.
Earlier in October, a Parliamentarian from Tonga, the last Polynesian kingdom of the South Pacific had also addressed the subject.
The official, at the time had said that Western Union was cutting over 50 percent of their remittance, a hurdle another small nation El Salvador tackled by legalising Bitcoin as a legal tender.
For now, Ripple is looking forward to assisting Palau get its own national digital currency.
“We have a wonderful opportunity to bring together our technology and experience with the unique characteristics of Palau to make a real economic and social impact for the country,” said James Wallis, vice president of Central Bank Engagements at Ripple.
Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.