DEC 19, 2023
Palau proceeds with Ripple to Phase 2 of PSC currency program launch
The Ministry of Finance of Palau has officially initiated the second phase of its Palau Stablecoin (PSC) program, a move aimed at expanding the digital ecosystem and enhancing user engagement.
The launch was confirmed by Jay Hunter Anson, a cybersecurity consultant in Palau and adviser to the Ministry of Finance. Taking to the X social media platform on Friday, Anson outlined that “the Republic of Palau Ministry of #Finance seeks to expand accessibility and user participation, reaching a wider audience through educational initiatives.”
PSC is a digital currency issued and managed by the Palau Ministry of Finance. It’s pegged to the United States dollar and operates on Ripple’s XRP Ledger. It first emerged that the authorities in Palau were collaborating with Ripple on this project back in July.
Building on phase 1 success
In this next phase, Palau seeks to extend its collaboration with Ripple, leveraging Ripple’s central bank digital currency (CBDC) platform and technical expertise.
The Ministry of Finance in Palau had previously announced the success of the first phase of the PSC program earlier this month. This initial three-month phase involved 168 volunteers from government employees who received 100 PSC each to use at local retailers participating in the program. Payments were made through mobile phones by scanning a QR code, and both retailers and volunteers provided positive feedback about their experience with the digital currency.
Anson highlighted that the focus of the second phase of the PSC pilot program includes establishing new collaborations for marketing and sustainable development goals. Furthermore, the program prioritizes the development of a digital ecosystem and increased user engagement, with a strong emphasis on regulatory compliance.
Anthony Welfare, CBDC Strategic Adviser at Ripple, shared his insights on the launch of the PSC pilot program’s second phase via social media. He underscored the advantages of blockchain-based digital currency, citing reduced transaction fees and the potential to address the environmental impact of money circulation. However, Welfare also acknowledged specific challenges, including the complexity of moving traditional currencies across Palau’s 340 islands and the high mobile data costs in the country.
Welfare pointed out a notable feature of PSC, emphasizing that Palau residents can conduct offline transactions using this blockchain-based digital currency, even during power outages.
Agile technological adoption
Earlier this month Ripple President Monica Long was featured by the New York Times in an article where she set out expectations for 2024. Long articulated that she believes that “people cannot maintain their faith in a financial system that relies on systems built decades ago to move money.”
With the rise of cryptocurrency and blockchain technologies, it’s clear that our financial rails can and will be internet-native, in turn bringing greater accessibility and affordability to financial services for everyone,” Long added.
Smaller nations like the Micronesian Republic of Palau have been more nimble in adjusting to the changes that Long refers to. This PSC stablecoin project demonstrates that reality.
Palau is not alone. It emerged a few weeks ago that the Solomon Islands had entered into a collaboration with Japanese blockchain technology firm Soramitsu. As part of that project, a CBDC named Bokolo Cash has been unveiled as a proof of concept.