Republic of Palau Partners with Ripple to Develop Climate-Friendly National Digital Currency

Digital payments network Ripple has partnered with the Republic of Palau to help the Pacific island nation develop its own digital currency.

The initial focus of the partnership will be the development of a U.S. dollar-backed digital currency to help facilitate cross-border payments in the country. In its statement, Ripple said the collaboration “could implement the world’s first government-backed national stablecoin in the first half of 2022.”

According to Ripple, this national digital currency may not necessarily be just another central bank digital currency (CBDC).

“Ripple will provide technical, commercial, design, and policy support to Palau. At the same time, exploring a USD-backed stablecoin and related use cases (such as company registration) on the XRP Ledger may provide a CBDC for countries like Palau viable alternatives."

Palauan President Suangel Whipps Jr. said the national digital currency will "provide greater financial opportunities for Palauan citizens."

As an island nation, Palau is particularly vulnerable to some of the impacts of climate change, which Ripple said was one of the reasons Palau was chosen. The company says the XRP Ledger is “carbon neutral and 120,000 times more energy efficient than proof-of-work blockchains.”

“We are delighted to be working with Palau to achieve its financial and climate-related goals,” said James Wallis, vice president of central bank operations at Ripple.

"We have a fantastic opportunity to combine our technology and experience with Palau's unique characteristics to bring real economic and social impact to the country."

Ripple is no stranger to climate and environmental considerations. In February of this year, it announced its goal of achieving net zero carbon by 2030, first making XRP net zero carbon with the help of the EW Zero tool.

EW Zero is an open-source solution from Energy Web that allows businesses to purchase tokenized renewable energy to help them become net carbon neutral. Ripple also led a $44 million funding round for fintech provider Nelnet Renewable Energy to help fund environmental initiatives across the United States.

Ripple has been busy settling its case with the U.S. SEC over whether XRP tokens were issued as unregistered securities in 2013. Brad Garlinghouse recently said he thought the case was making good progress and would conclude in 2022.

XRP is currently trading at around $1.05. It was up 0.42% for the week, but has lost 5.47% so far in November.

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