Global digital payment service network Ripple has partnered with the Republic of Palau to develop a USD-backed digital currency that will enable seamless cross-border transactions.
Ripple said the collaboration has the potential to run the world’s first government-backed national stablecoin. The company further stated that the national digital currency could be implemented as early as the first half of 2022. However, such a currency cannot necessarily be classified as another CBDC, Ripple clarified.
“As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple,” said President Surangel Whipps Jr. “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.”
Palau chose Ripple because it’s carbon-neutral and 120,000x more energy-efficient than proof-of-work blockchains. Ripple by far is the most eco-friendly compared to other blockchain ledgers available. Not only is Ripple more eco-friendly, it also provides benefits such as scalability, speed, and low cost.
For Palau, a partnership with Ripple means different levels of technical, sales, design and policy support. For Ripple, exploring a USD-backed stablecoin and its associated use cases is crucial to developing a viable alternative to central bank digital currencies.
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