Palau Finance Ministry Launches Second Phase of Stablecoin Project
Latest News News

Palau Finance Ministry Launches Second Phase Of Its CBDC Project

Palau Finance Ministry has flagged off the second phase of its XRPL-powered central bank digital currency (CBDC) pilot program following the successful completion of Phase 1. 

Palau cybersecurity advisor Jay Hunter Anson announced on the X platform (formerly Twitter) that the Palau Finance Ministry has officially launched the second phase of the Palau Stablecoin (PSC) project. 

This phase will focus on building a robust digital ecosystem, improving accessibility and user engagement, and emphasizing legal and regulatory compliance. 

According to Anson, the Republic of Palau will continue its partnership with Ripple in the second phase. Consequently, the team behind PSC will leverage both Ripple’s CBDC platform and the company’s technical expertise. 

Furthermore, Anson stated that the Phase 2 of the PSC pilot program will result in new collaboration on marketing and sustainable development goals.   

The plan will integrate financial institutions, legal and regulatory compliance, regulatory authorities, legal frameworks, businesses, and users to achieve transaction security and transparency in line with international standards.

Furthermore, Jay Hunter Anson stated that Palau will continue to collaborate with Ripple, utilizing Ripple’s carbon-neutral CBDC platform and technology.

Notably, the phase 2 of the PSC program will focus on developing a robust digital ecosystem and bolstering user participation with an emphasis on regulatory compliance. 

See Also: Republic Of Palau Highly Satisfied With Ripple-based CBDC Pilot

Ripple CBDC Advisor Reacts 

Anthony Welfare, Ripple’s CBDC Strategic Advisor, has taken to the X (formerly Twitter) platform to react to the Phase 2 launch of the Palau stablecoin (PSC) pilot program. 

Welfare confirmed that the Phase 2 of the PSC pilot program has been launched and also highlighted the benefits of blockchain-based digital currency, including low transaction fees and mitigating the carbon footprints associated with money flow. 

The Ripple CBDC advisor also identified some challenges, including moving fiats around the 340 islands in Palau. Additionally, he mentioned that mobile data is expensive in the country. 

Welfare noted that Palau residents can make offline payments during power outages with a blockchain-based digital currency like PSC. 

For context, PSC is a dollar-pegged digital currency backed 1:1 with the USD. The USDs backing PSC are held in an FDIC-insured commercial bank. It bears mentioning that PSC is issued on the XRP Ledger (XRPL). 

See Also: Ripple Shifts Focus To CBDC Projects And Boost XRPL In 2023

PSC Phase 1 

The development comes days after Palau’s Ministry of Finance declared the first phase of the PSC program a success. Phase 1, which lasted for three months, saw the Ministry of Finance recruit 168 volunteers from government employees. 

The selected volunteers were given 100 PSCs each to spend at participating local retailers. Participants made payments using their mobile phones to scan a QR code.  

Interestingly, the participating retailers and volunteers gave positive feedback regarding their experience with the digital currency.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.