Palau advances CBDC with Ripple in phase 2 of PSC program launch

The Ministry of Finance of Palau officially launched the second phase of its Palau Stablecoin (PSC) program. Jay Hunter Anson, a cybersecurity consultant in Palau and adviser to the Ministry of Finance, confirmed the program’s second phase launch on Dec. 15 in a post on X (formerly Twitter).

Anson said that Palau aims to extend its partnership with Ripple in phase two, allowing the PSC team to leverage Ripple’s central bank digital currency (CBDC) platform and technical expertise.

PSC is a digital currency pegged to the United States dollar, which uses Ripple’s XRP Ledger. 

Additionally, Anson highlighted that the focus of the second phase of the PSC pilot program will establish new collaborations for marketing and sustainable development goals. Phase two of the PSC program will also prioritize the development of a digital ecosystem and increased user engagement, emphasizing adherence to regulatory compliance.

Yesterday the Republic of Palau Ministry of Finance officially launched Phase 2 of the Palau #Stablecoin (PSC) program, based on a 1:1 tokenized U.S. Dollar.
 
The Republic of Palau Ministry of #Finance seeks to expand accessibility and user participation, reaching a wider… pic.twitter.com/FUt7mM8CLr

— Jay Hunter Anson (@JHX_1138) December 15, 2023

Anthony Welfare, CBDC strategic adviser at Ripple, also shared his thoughts on the PSC pilot program’s phase two launch.

Welfare emphasized the advantages of blockchain-based digital currency, citing benefits such as reduced transaction fees and the potential to address the environmental impact of money circulation.

The Ripple adviser also pointed out specific challenges, such as the complexity of moving traditional currencies across the 340 islands of Palau. Moreover, he noted that mobile data costs are high in the country.

Related: Ripple issues white paper on CBDCs, reiterates belief in their potential

Welfare mentioned that Palau residents can conduct offline transactions using a blockchain-based digital currency such as PSC, even during power outages.

Palau’s Ministry of Finance announced the success of the first phase of the PSC program on Dec. 7. The first phase, spanning three months, involved 168 volunteers from government employees.

The chosen volunteers received 100 PSC each to use at local retailers participating in the program. Participants made payments through their mobile phones by scanning a QR code. The participating retailers and volunteers provided positive feedback about their experience with the digital currency.

Magazine: Lawmakers’ fear and doubt drives proposed crypto regulations in US