With the increased use of digital assets across several mainstreams, some governments are planning to keep up.
As a result, most governments worldwide are working on and experimenting with building a national digital currency that can be linked to their fiat currencies. This is the fundamental reason for the Republic of Palau’s partnership with Ripple’s digital payment network.
Ripple will help the Pacific Island country build its digital currency as part of the cooperation. The launch assures that the digital currency is USD-backed and will enable Palau’s cross-border payments.
Furthermore, Ripple claimed that the agreement would result in the creation of a national stablecoin in the first half of next year. This will be the first of its sort in the world, with official funding.
Furthermore, Ripple suggested that Palau’s national digital currency might not be a Central Bank Digital Currency (CBDC). According to the digital payment network, its assistance to Palau spans design, business, policy, and technology.
It discussed the impact of investigating a USD-backed stablecoin and its use cases on the XRP Ledger. It stated that such an application would be a better alternative to CBDCs for a country like Palau.
President Suangel Whipps Jr. of Palau, for his part, affirmed that the national digital currency provides residents with enhanced financial access.
Ripple’s Commitment to Climatic Considerations
Furthermore, as an island, Palau is vulnerable to the effects of climate change. This is also one of the reasons for the collaboration with Ripple. According to the network, XRP Ledger is carbon-neutral and saves 120,000 times more energy than Proof-of-Work blockchains.
Ripple’s VP of Central Bank Engagements, James Wallis, expressed his company’s enthusiasm for engaging with Palau in dealing with financial and climatic challenges. He stated that it provides them with the chance to showcase their skills and technologies within the context of Palau’s unique characteristics. As a result, they will significantly impact both the country’s economic and social elements.
Ripple’s position among environmental and climatic forces extends beyond that of a novice. In February of this year, the network declared its goal of becoming carbon-neutral by 2030. The step entails employing the EW Zero tool to reduce XRP’s carbon footprint to zero.
As an open-source Energy Wen solution, EW Zero will allow developers to purchase tokenized renewables, allowing them to be carbon net-neutral.
Furthermore, Ripple launched a $44 million fundraising effort for Nelnet Renewable Energy, a finance business. This project aimed to sponsor environmentally responsible campaigns in the United States.
The payment network is still arguing with the SEC about whether the XRP coins issued in 2013 were unregistered securities. However, according to Brad Garlinghouse, the problem has gradually improved and will be resolved by 2022.