Palau has initiated the second phase of its Palau Stablecoin (PSC) program, as announced by Jay Hunter Anson, a cybersecurity consultant and adviser to the Ministry of Finance. In a recent update on X (formerly Twitter), Anson confirmed the program’s progression on Dec. 15.
This phase will continue Palau’s collaboration with Ripple, utilizing its central bank digital currency (CBDC) platform and expertise. The PSC, a digital currency anchored to the U.S. dollar, operates on Ripple’s XRP Ledger.
Anson outlined that phase two will focus on forging new partnerships for marketing and sustainable development, developing a digital ecosystem, enhancing user engagement, and ensuring regulatory compliance.
Anthony Welfare, a CBDC strategic adviser at Ripple, also commented on the development. He highlighted the benefits of a blockchain-based digital currency, including lower transaction costs and the possibility of mitigating the environmental impact of traditional money circulation.
Welfare pointed out the logistical challenges in Palau, such as the high cost of mobile data and the difficulty of moving traditional currencies across its 340 islands. He noted the potential for PSC to facilitate offline transactions, a crucial feature in areas prone to power outages.
The first phase of the PSC program, concluded on Dec. 7, was deemed successful. It involved 168 government employee volunteers who were each allocated 100 PSC for transactions at participating local retailers. The feedback from both retailers and volunteers was largely positive, with payments made easily through QR code scans on mobile devices.