Republic of Palau and Ripple Announce Collaboration to Develop a Digital Currency

Gitumani  |  Nov 24, 2021

Ripple, the leading provider of crypto solutions for cross-border payments, has teamed up with the Republic of Palau for exploring the country's first national digital currency. Despite several challenges, Ripple has become a significant player in the global payments industry. 

Digital dollars will be created in Palau using the XRP Ledger, Ripple said in a press release. The company has also stated that the goal is to create a USD-backed stablecoin around which additional services, such as business registrations can be built.

Ripple Partners with the Republic of Palau for Developing a Digital Currency

For the time being, Palau does not use fiat currency. The U.S. dollar is legal money in the United States, just as in El Salvador. Instead of using any cryptocurrency, the tiny island in Oceania wants the government to produce a digital equivalent of the U.S. dollar.

As such, Palau's effort seems to be a stablecoin issue rather than a CBDC. With no central bank in Palau, this decision makes perfect sense. Surangel S. Whipps Jr., president of Palau, was sure that a financial product tailored to the island's needs might be established in the future thanks to Ripple's technology.

The partnership with Ripple is a natural extension of our commitment to financial innovation and technology. Cross-border payments and a national digital currency will be the emphasis of the partnership's first phase, which will help the inhabitants of Palau get more financial access."

Ripple's blockchain network is efficient, carbon-neutral, quick, and cost-effective. Ripple has also noted that the XRP Ledger would allow Palau to settle transactions in less than five seconds at the cost of less than a cent per transaction.

Problems with the Regulators

The native coin of Ripple's XRP Ledger, XRP, doesn't appear to react in response to this news. XRP corrected roughly 34% in three weeks after the July 2021 rally, going from $1.4 to $0.86. Since then, it has not breached the $1.2 resistance level or the $1 support level.

XRP surged from $1.03 to $1.06 on November 23, a 2.97 percent increase. However, with its price at $1.045, the token has dropped by roughly 2%, showing no trend. Ripple's regulatory issues are most likely to be blamed for this reluctance.

The business is currently being sued by the SEC for allegedly marketing XRP as unregistered securities. Ripple and its XRP coin have taken a significant hit. The XRP Army, XRP's once-dominant fan following on Crypto Twitter, where the token was previously ranked in the top three by market capitalization, has seen a drastic drop in popularity in recent times.

Related News