Is the XRP ledger the answer to green digital currencies?
The XRP ledger is a decentralized, public blockchain that is fronted by a global developer community. Its strong open-source foundation provides developers the tools to execute the most demanding of projects, without harming the environment. Developed by cryptocurrency mainstay Ripple, the XRP ledger is also easy to deploy, has low transaction costs, and boasts a knowledgeable, committed community.
As an island nation that prioritizes climate sustainability, the Republic of Palau just announced a partnership with Ripple to explore its planned national digital currency and its use cases with the XRP ledger. The partnership will initially focus on developing strategies for cross-border payments plus a USD-backed digital currency for Palau.
The Oceanic country is planning to implement the world’s first government-backed national stablecoin in the first half of 2022. But what’s more interesting is that Palau is also exploring a USD-backed stablecoin and associated use cases — such as a corporate registry — on the XRP Ledger. This could provide a viable alternative to central bank digital currencies (CBDCs) for countries like Palau.
“As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple,” said Palau President Surangel S. Whipps, Jr. “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.”
Palau understands the potential for financial technologies, including blockchain, to transform its economy and position the country as a highly desirable country to do business with. The same technologies will also transform how its citizens access financial services and enable efficient cross-border remittances.
As such, Palau chose Ripple because of its extensive experience in blockchain and building global payment systems, and the XRP Ledger because it is carbon-neutral, and said to be 120,000x more energy-efficient than proof-of-work blockchains. What’s more, the XRP Ledger provides significant benefits such as scalability, speed, and low costs.
“We are excited to be working with Palau to achieve its financial and climate-related goals,” said James Wallis, VP of Central Bank Engagements at Ripple. “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 XRP Ledger provides financial institutions and government bodies such as Palau the ability to fully settle transactions, charging just fractions of a penny per transaction and in just 3-5 seconds. To date, more than 5,400 currencies have been issued and traded on the XRP Ledger via its integrated decentralized exchange (DEX) and custom token functionality that makes it easy to create, issue, and manage any asset — including stablecoins.
Palau is just one of the many countries that are looking to leverage the benefits of cryptocurrencies. Earlier this year, El Salvador became the first country in the world to accept bitcoin as a legal tender. The country also just announced that it plans to construct a “Bitcoin City” near a volcano that will be funded by the cryptocurrency.
Nigeria became the first African country to roll out a national digital currency several weeks earlier while the Bahamas released the Sand Dollar in October 2020. Japan also recently announced plans for a new digital currency backed by bank deposits. The effort will involve the nation’s top banks and about 70 other companies and organizations.
Meanwhile, the Indian government is preparing to ban private cryptocurrencies and allow the country’s central bank to launch an official digital currency. China has also launched a crackdown on cryptocurrencies, where financial regulators and the central bank have made all digital currency transactions illegal.
29 November 2023
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