- Ripple Labs has announced a partnership with the island nation of Palau that will see the two develop a climate-friendly national digital currency.
- The country will also explore various use cases of the XRP Ledger, including as a corporate registry.
Ripple Labs, the firm behind the XRP cryptocurrency, has announced its latest partnership with the Republic of Palau. Under the partnership, the island country will build a climate-friendly USD-backed national digital currency targeting cross-border payments. Palau will also seek to leverage the XRP Ledger for other use cases including as a corporate registry.
Palau is an island country in the western Pacific, made up of over 300 islands. It shares maritime borders with Indonesia and the Philippines and is in free association with the U.S. It’s home to just 18,200 people according to the latest U.N estimates.
Ripple’s partnership with Palau will see the implementation of “the world’s first government-backed national stablecoin in the first half of 2022 for which Ripple would provide Palau with technical, business, design and policy support.”
Ripple didn’t detail exactly what makes the new USD-backed stablecoin different from the existing central bank digital currencies, which countries such as Nigeria and the Bahamas have already launched. It did, however, claim that Palau would go beyond the financial use cases of the national stablecoin and explore associated use cases such as a corporate registry on the XRP Ledger.
Ripple champions climate-friendly causes
The President of Palau, Surangel Whipps Jr., expressed his delight in partnering with Ripple, which he described as part of his government’s commitment to financial innovation and technologies.
“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,” he commented.
Ripple is also excited to partner with Palau, marking a shift from its enterprise-facing applications to underpinning national projects. James Wallis, the vice president of central bank engagements at Ripple commented:
We are excited to be working with Palau to achieve its financial and climate-related goals. 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.
For Palau, climate considerations are central to their development agenda. Made up of small islands, the country is one of the most adversely affected by climate change. In recent years, the country has experienced stronger typhoons, hotter conditions, coral reef loss and coastal flooding. Climate change has also adversely affected the two major industries – tourism and fishing.
The partnership with Ripple was thus strategic for Palau. Ripple’s XRP Ledger is purportedly carbon-neutral and 120,000x more energy-efficient than proof-of-work blockchains like Bitcoin.