There has been a sudden surge in cryptocurrency’s popularity around the world. Countries, whether large or small, are attempting to integrate blockchain and cryptocurrencies into their economy by going digital.
Several central banks are seeking to introduce their own central bank digital currencies (CBDCs), while others are focusing on stablecoins.
With a population of approximately 18,000, Palau is probably not the first location that comes to mind when most people think of technologically advanced nations.
However, the tiny Pacific island nation is on an aggressive campaign to establish the official adoption and acceptance of cryptocurrency.
Palau And Ripple Work On National Stablecoin
Stablecoins and the US dollar. Image: Finance Magnates.
According to Republic of Palau President Surangel S. Whipps Jr., the country’s information technology engineers have been proactively exploring the potential of developing a national stablecoin with blockchain company Ripple Labs.
The president has pushed the implementation of a stablecoin as a method to improve the quality of life for Palauans and diversify the economy away from tourism, which before the COVID-19 health crisis accounted for around 50% of the archipelago’s gross domestic product.
Palau President Surangel S. Whipps, Jr. said the country’s IT team is working with Ripple Labs to explore creating a “national stablecoin.” As previously reported, Palau will issue ID cards to its digital residents in the form of NFTs on the BNB Chain. https://t.co/WM1k9DFZvJ
— Wu Blockchain (@WuBlockchain) December 26, 2022
The United States dollar is the official currency of Palau, which lacks an established central bank.
The objective of the national stablecoin program is to develop a stablecoin backed by USD. Whipps characterized the stablecoin proposal as a “move toward our own central bank digital currency.”
Whipps also discussed Binance CEO Changpeng Zhao’s recent visit to the island nation and their discussions on how to utilize the crypto exchange’s payment infrastructure to facilitate payments for digital citizens of the nation.
Republic of Palau President Surangel S. Whipps Jr. Image: Watcher Guru.
Stablecoin Seen To Prop Up Palau’s Economy
“This is a new world for Palau […] and one of the advantages we have is we’re small and hopefully we can mobilize our government and be more adaptive to the changes that need to be made in this fast-changing environment,” Whipps said in quotes by Watcher Guru.
According to a survey from the Graduate School USA, Palau’s GDP decreased by 8.7 percent in 2020, primarily due to the collapse of tourism because of the pandemic.
Whipps revealed at the beginning of the previous year that he foresaw citizens purchasing products with their smartphones and government employees earning instantaneous pay rather than waiting days for the transaction to be processed at their local bank.
Meanwhile, Whipps also disclosed that he had a virtual meeting with Ethereum co-founder Vitalik Buterin, during which they discussed the possibility of launching an R&S ID ecosystem to the developer community and determining “how Palau’s digital residency can interact with the concept of so-called bound ID systems.”
The president continued:
“We are also examining other services that we may offer, such as registration of e-corporations, so that digital citizens can do global business through Palau’s easy R&S portal.”