Palau announced that it successfully concluded its central bank digital currency (CBDC) pilot project with Ripple last September. Palau conducted a final survey where 81.8% of respondents showed satisfaction with the use of the digital currency. The Palau Ministry of Finance confirmed that it will make regulations to implement the pilot project nationwide.
The Republic of Palau announced that it has successfully concluded its central bank digital currency (CBDC) pilot project with Ripple. The Ministry of Finance concluded the pilot on December 7, a project that started in June and concluded at the end of September.
The Palau government emphasized that it employed 200 people in the project to test Ripple’s CBDC and make local purchases, on a retail scale, where only the equivalent of $20,000 was used. Only selected retailers participated in the experiment and were able to redeem the CBDC for dollars.
Republic of Palau and Ripple Successfully Conduct CBDC Test
Palau noted that retailers who used its digital currency expressed “great satisfaction” and suggested that the next test include more functions such as: national deployment, financial institutions, and even regulatory bodies. However, Palau would have to establish a regulatory framework before its next test.
The Palau Ministry of Finance maintained that its next step will be to implement CBDC nationwide as a cost-effective form of payment. He revealed that “it collected a large number of opinions” with which they will seek to digitize their economy and make it “more sustainable.”
“This phase symbolizes Palau’s dedication to pioneering a secure, stable and accessible digital payments system, positioning the nation as a leader in the integration of technology into economic practices.”
Last September, Palau (which operates its economy with the US dollar) announced the suspension of its CBDC that it carried out in alliance with Ripple. The Palau Stablecoin called “Kluk” concluded on September 15, after months of experimental phase.
Since November 2021 (in the middle of the bull market) Ripple partnered with the Republic of Palau to launch an experimental digital currency. Palau has been open to blockchain technology for some time.
Palau Pioneer in Experimenting with a CBDC
Since 2022, the Pacific republic has issued an ID backed by Cryptic Labs that works with a non-fungible token (NFT) through Binance BNB. Since its launch, PSC was conceived as: “a limited test for specific use cases.”
On this occasion, some of the highlights of the Palau CBDC with Ripple were the following:
- Only 49.4% of those involved provided feedback to the government.
- 84.1% and 65.9% of participants use cash and credit cards as daily means of payment.
- 60% of those surveyed never use their cell phone to make payments.
- The majority rated the overall experience of using the PSC and only 9.7% considered the CBDC experience “unsatisfactory.”
- 58.75% found setting up and using the PSC wallet to make payments easy and 9.8% found it not easy.
- 50.6% had difficulties when trying to make payments.
- 81.8% of those surveyed showed satisfaction with the timeliness of the resolution of the problems encountered.
- Among the problems reported in the survey: slowness in using the wallet and processing payments, unavailability with the QR code, and having to manually enter the Monero address.
In July, Palau announced the launch with Ripple of the Palau Stablecoin (PSC) pilot project called “Kluk”, which would issue XRP Ledger. Additionally, the first stablecoins were distributed to government employees.
By Audy Castaneda
