The island nation of the Republic of Palau has partnered with San Francisco, US-headquartered crypto solutions provider Ripple to explore the creation of its national digital currency. The partnership will first focus on developing avenues for inter-border payments that could be facilitated by this digital currency that will be backed by the US dollar, if all goes according to plans. As part of the deal, Ripple will provide technology, business, design and policy support to Palau. The government of Palau seeks to provide people with an alternative to bank currencies with expanded financial access.
Palau is a country with approximately 340 islands, which form the western chain of the Caroline Islands located in the Pacific Ocean. The country’s economy is affected by remittances – money sent back home by their expatriates working abroad.
Such nations, on a remittance basis, receive more money than their native peoples when transactions are made using crypto technology. Since then cryptocurrency Not regulated by any bank, no service fee is charged on cross border financial transfers.
As a service fee, the international money transfer platform waives a significant percentage of remittances and transfers a smaller amount than expected.
Earlier in October, an MP from Tonga, the last Polynesian kingdom of the South Pacific also addressed this topic.
Officials at the time said that Western Union was deducting more than 50 percent of their remittances, an obstacle for another small nation. El Salvador dealt with by legalization Bitcoin as legal tender.
For now, Ripple is looking forward to helping Palau get its national digital currency.
“We have a great opportunity to bring together our technology and experience with Palau’s unique features to create a real economic and social impact for the country,” said James Wallis, Vice President of Central Bank Engagement at Ripple.