Palau halts Ripple-based stablecoin pilot program unexpectedly

TL;DR Breakdown

  • Jay Hunter Anson, director of Palau’s Digital Residency Office, announced the sudden halt of the Palau Stablecoin pilot program.
  • Palau had partnered with Ripple to launch the stablecoin on Ripple’s Central Bank Digital Currency Platform.
  • Anson did not disclose specific reasons for the halt but mentioned a forthcoming survey for participants.

Description

Jay Hunter Anson, the director of the Digital Residency Office in Palau’s Ministry of Finance, announced the abrupt halt of the Ripple (XRP)-based Palau Stablecoin (PSC) pilot program. Known locally as “Kluk” for its bird insignia, the program aimed to offer a fee-free, secure, and transparent payment option for Palau residents. The U.S. Dollar backed … Read more

Jay Hunter Anson, the director of the Digital Residency Office in Palau’s Ministry of Finance, announced the abrupt halt of the Ripple (XRP)-based Palau Stablecoin (PSC) pilot program. Known locally as “Kluk” for its bird insignia, the program aimed to offer a fee-free, secure, and transparent payment option for Palau residents. The U.S. Dollar backed the stablecoin, and has generated significant buzz since its launch in July 2023.

Anson took to X, formerly known as Twitter, to make the announcement. He stated that the distribution of PSC would cease on September 8. Moreover, the stablecoin will become worthless for transactions starting September 15. The news has puzzled cryptocurrency enthusiasts and Palau citizens, as the program was initially met with considerable enthusiasm.

The Republic of Palau had partnered with Ripple to launch the PSC on Ripple’s Central Bank Digital Currency (CBDC) Platform. Released in May, the platform had already been in discussions with over 20 countries for similar initiatives. Palau and Ripple began their collaboration in 2021, aiming for an initial launch in 2022. However, the launch took place in July 2023, adding another layer of complexity to the sudden termination.

Anson did not offer any specific reasons for the abrupt end but mentioned that a survey would be emailed to all participants in the trial program next week. He emphasized the importance of user feedback in shaping the final report, which will be presented to the Palau Congress and President. According to Anson, the collective insights gained will guide any future phases of the stablecoin program, should they be approved.

The decision to halt the program and conduct a survey has led to speculation about the government’s role in the outcome. Anson had previously stated that the project would be evaluated after two months, hinting at potential expansion plans. Now, with the sudden freeze, those plans are off the table.

Many questions remain unanswered as the cryptocurrency world and Palau residents await further details. The unexpected halt of the PSC pilot program has undoubtedly sent ripples through the digital currency market, affecting not just Palau, but also Ripple’s broader ambitions in central bank digital currencies.

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