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Palau, located in the western Pacific Ocean, is concluding its United States dollar stablecoin initiative after initiating the pilot program in August.
Jay Hunter, a member of the Palau Ministry of Finance and leader of the digital residency initiative, announced on X (formerly Twitter) that the government will halt the distribution of the Palau Stablecoin (PSC) on Sept. 8.
After the distribution suspension, the Palau Stablecoin will also be frozen post-Sept. 15, rendering it unusable for transactions by users, Hunter stated, adding:
“After Sept. 15, you will no longer be able to spend the PSC. This will give us time to process retailer redemptions before the pilot’s official termination at the end of the month.”
In his announcement, Hunter did not specify the reasons for freezing the stablecoin, merely mentioning that the government plans to distribute a survey to pilot participants next week. This decision followed the government’s launch of PSC in late July.
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“If we are authorized to proceed with the next phase of the stablecoin program, our shared insights will inform the path forward,” the official remarked. He emphasized that user feedback would be essential for crafting the final report for the Palau Congress and the president.
Related: Visa taps into Solana to widen USDC payment capability
This announcement comes shortly after Hunter shared a study focused on stablecoin technology and associated security issues from the National Institute of Standards and Technology. Released in September, the study assessed various essential security and stability attributes and identified “18 potential issues in stablecoin implementations.”
Stablecoins are a type of cryptocurrency that aim to maintain a stable price relative to a specified asset (usually a fiat currency).
Much has been written about how to use stablecoins and about the economic implications of doing so, specifically price variability. However,… pic.twitter.com/Hek7tUqXZR— Jay Hunter Anson (@JHX_1138) September 5, 2023
Referred to as the Kluk, Palau Stablecoin is intended to lower transaction costs and improve the speed of transfers for citizens, merchants, and the government of Palau. The stablecoin was developed on Ripple’s XRP Ledger, a platform dedicated to the issuance of central bank digital currencies (CBDC).
The XRP Ledger CBDC platform also underpins similar pilot initiatives in countries such as Hong Kong, Bhutan, Colombia, and Montenegro.
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