Palau to freeze USD-backed stablecoin after pilot launch in July

Palau, a rustic within the western Pacific Ocean, is wrapping up its U.S. greenback stablecoin venture after launching the pilot in August.

Jay Hunter, Palau Ministry of Finance member and head of digital residency program, took to X (previously Twitter) to announce that the federal government will cease the distribution of the Palau Stablecoin (PSC) on Sept. 8.

Following the distribution halt, the Palau Stablecoin may even be frozen after Sept. 15, turning into unavailable for spending by customers, Hunter stated, noting:

“After Sept. 15 you’ll not be capable of spend the PSC. This may give us time to course of retailer redemptions earlier than the pilot’s official termination on the finish of the month.”

Within the announcement, Hunter didn’t present actual causes for freezing the stablecoin, solely noting that the federal government will ship a survey to pilot members subsequent week. The transfer got here weeks after the federal government launched the PSC in late July.

“If we’re approved to maneuver ahead with the subsequent part of the stablecoin program, our collective classes realized will form the way in which forward,” the official stated. He added that customers’ suggestions can be crucial to growing the ultimate report back to the Palau Congress and the president.

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The information comes shortly after Hunter posted a examine dedicated to stablecoin know-how and associated safety issues from the Nationwide Institute of Requirements and Expertise. Issued in September, the examine evaluated a number of the vital properties of safety and stability and recognized “18 potential points in stablecoin implementations.”

Stablecoins are a kind of cryptocurrency that intention to take care of a secure worth relative to a specified asset (often a fiat forex).

A lot has been written about the way to use stablecoins and concerning the financial implications of doing so, particularly worth variability. Nevertheless,… pic.twitter.com/Hek7tUqXZR

— Jay Hunter Anson (@JHX_1138) September 5, 2023

Nicknamed the Kluk, the Palau Stablecoin is designed to cut back transaction prices and improve the pace of transfers for residents, retailers and the federal government of Palau. The stablecoin was constructed on Ripple’s XRP Ledger, a platform centered on the issuance of central financial institution digital currencies (CBDC).

The XRP ledger CBDC platform additionally serves as the muse for comparable pilot tasks in nations like Hong Kong, Bhutan, Colombia and Montenegro.

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