[NEWS] Republic of Palau tests XRP ledger-based stablecoin "PSC"

On the 26th, Ripple announced that it will partner with the Republic of Palau to test the Palau Stablecoin (PSC), a stablecoin that utilizes the XRP ledger.

The stablecoin, also known as "Kluk," will be backed by the US dollar and issued on the XRP ledger. In the first phase, about 200 Palau government officials and private companies will participate.

Ripple claims that its operating model is similar to other private reserve-backed stablecoins such as USD Coin (USDC) and Tether (USDT), but that the PSC is significantly different in that it is overseen by the Palau Department of Finance.

Specifically, it explains that the Palau Department of Finance will guarantee a 1:1 reserve at all times and oversee the issuance and redemption of the stablecoin.

Palau President Surangel S. Whipps Jr. commented, "Our partnership with Ripple to help issue our national digital currency is part of our commitment to leading financial innovation and technology to provide greater financial access to the people of Palau."

He also said, "By digitizing our currency, we hope to mobilize our economy and government processes to improve financial transactions and empower our people." He continued, "Palau is a small country and has the advantage of being innovative and agile in issuing stablecoins. We trust Ripple's longstanding expertise in CBDC and blockchain, and the carbon-neutral XRP ledger to help us issue a national digital currency that will bring greater economic success to our people."

In order to ensure that the PSC is trusted as a safe and effective financial tool to support economic activity for the people of Palau, the following success criteria must be achieved in Phase 1 of the pilot.

• The Palau Treasury can safely and securely issue, distribute, and process PSCs, and can also cancel PSCs with full control over the total amount in circulation in real time 24 hours a day, 365 days a year.
• Palau government employees will use the PSC as a point-of-sale payment method to purchase goods and services at select retailers.
• Palauan retailers can safely and securely accept payments from individuals using the PSC.

Jay Hunter Anson of the Palau Department of Finance expressed his excitement on Twitter, saying, "If successful, Kluk will revolutionize the way goods and services are sold."

Reference:Announcement, Anson's Twitter
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