Palau, which has a population of about 18,000, is perhaps not the first country that springs to mind when most people think of places with advanced technology. But the tiny Pacific island nation is waging a fierce battle to boost the adoption of cryptocurrencies and its underlying technology.
Surangel S. Whipps Jr., the president of the Republic of Palau claims that the nation’s information technology professionals have been aggressive in researching the possibility of creating a national stablecoin with blockchain company Ripple Labs.
In order to enhance the standard of living for Palauans and diversify the economy away from tourism, which before the COVID-19 health crisis accounted for over 50% of the island nation’s gross domestic product (GDP), the president has advocated for the establishment of a stablecoin.
Palau does not have a central bank, hence the dollar is the official currency there. The creation of a stablecoin backed by USD is the goal of the national stablecoin program. The stablecoin plan was described by Whipps as a “step toward our own central bank digital currency.”
The president also spoke about Binance CEO Changpeng Zhao’s recent trip to the island nation and their conversations about how to use the payment infrastructure of the cryptocurrency exchange to enable payments for the country’s digital population.
At the beginning of 2021, he also disclosed that he saw citizens using cellphones to make purchases and government personnel receiving fast payments rather than having to wait days for the transaction to be processed at their local bank.
The recognition of cryptocurrencies has tremendously increased after the Covid-19 bull phase. Countries of various sizes are attempting to digitally transform their economies by incorporating blockchain and crypto. While some central banks are concentrating on stablecoins, others are attempting to launch their own central bank digital currencies (CBDCs).