June 14, 2024
Palau Concludes U.S. Dollar Stablecoin Initiative
Altcoins News

Palau Wraps Up U.S. Dollar Stablecoin Project, Freezes PSC After Pilot Phase

Palau, a nation located in the western Pacific Ocean, is concluding its U.S. dollar stablecoin initiative after initiating the pilot program in August.

Jay Hunter, a member of the Palau Ministry of Finance and the head of the digital residency program, made an announcement on X (formerly known as Twitter) stating that the government will stop the distribution of the Palau Stablecoin (PSC) on September 8.

Following the cessation of distribution, the Palau stablecoin will be frozen starting September 15, making it unavailable for users to spend. Hunter mentioned, “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.”

Hunter did not provide specific reasons for freezing the stablecoin in the announcement, but he mentioned that the government plans to send a survey to pilot participants in the upcoming week. This decision comes a few weeks after the government launched the PSC in late July.

“If we are authorized to move forward with the next phase of the stablecoin program, our collective lessons learned will shape the way ahead,” the official remarked. He emphasized that user feedback would play a crucial role in formulating the final report to be presented to the Palau Congress and the president.

This development follows shortly after Hunter shared a study focused on stablecoin technology and associated security considerations from the National Institute of Standards and Technology. Issued in September, the study assessed essential security and stability features and identified 18 potential issues in stablecoin implementations.

The Palau Stablecoin, nicknamed the Kluk, was designed to reduce transaction costs and accelerate transfers for Palauan citizens, businesses, and the government. It was built on Ripple’s XRP Ledger, a platform dedicated to central bank digital currency (CBDC) issuance.

The XRP Ledger CBDC platform also forms the basis for similar pilot projects in countries like Hong Kong, Bhutan, Colombia, and Montenegro.

Image by freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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