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Ripple joins hands with Palau for ‘world’s first government-backed stablecoin’

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The island nation of Palau is the latest country to announce a partnership with Ripple. The collaboration is set to explore the country’s strategy for a national digital currency with the XRP Ledger (XRPL).

The Western Pacific country and Ripple are now looking at the first-ever USD-backed digital currency, along with strategies for cross-border payments.

In a statement, Palauan President Surangel Whipps Jr. said,

“The first phase of the partnership will focus on a cross-border payments strategy and exploring options to create a national digital currency, providing the citizens of Palau with greater financial access.”

According to the San Francisco-based blockchain firm, this partnership is unique as it involves the implementation of the “world’s first government-backed national stablecoin.” Especially since eRipple is set to provide “technical, business, design and policy support” to the CBDC-like experiment. A brief from the firm revealed that its use cases will be, in a way, “a viable alternative to central bank digital currencies (CBDCs).”

In the context of achieving financial and climate-related goals, James Wallis, VP of Central Bank Engagements at Ripple, stated,

“We have a wonderful opportunity to bring together our technology and experience with the unique characteristics of Palau to make a real economic and social impact for the country.”

The XRPL has provided such services to several financial institutions and government bodies in the past, including to countries like the U.K, Bhutan, Thailand, and UAE, among others. Among these, it is worth noting that Ripple recently announced joining the Digital Pound Foundation for the development and implementation of a digital currency in the United Kingdom.

Before that, Ripple joined Bhutan’s Royal Monetary Authority (RMA) to test retail, cross-border, and wholesale CBDC payment systems for a digital Ngultrum. So far, the network has issued and traded over 5,400 currencies, as per data from the company.

In a recent interview, RippleX General Manager Monica Long also pointed at new upcoming partnerships, adding that “many, many conversations with central banks have been happening around the world.”

Apart from that, XRP Ledger is going big on NFTs with the recent announcement of a Ripple Creator Fund.

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Shraddha is a full-time journalist at AMBCrypto. She has a keen interest in personal finance and wealth generation. Her primary focus is on the cryptocurrency space's applications for investment vehicles and portfolios