Ripple-Based Palau Stablecoin Pilot Program Abruptly Halted

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Key Takeaways

  •  Palau Stablecoin will be frozen after September 15, becoming unavailable for spending by users
  • A survey will be sent out to all pilot program participants in the coming week.

A jolt in the world of digital currencies as Jay Hunter Anson, Director of the Digital Residency Office at the Palau Ministry of Finance, made an unforeseen announcement on social media.

The Ripple-based Palau Stablecoin (PSC) pilot program, known as “Kluk” for its distinctive bird emblem, has abruptly stopped, leaving both cryptocurrency enthusiasts and Palau residents puzzled.

The PSC, launched with much fanfare in July 2023 through a collaboration between the Republic of Palau and Ripple, aimed to offer Palauan citizens a “fee-free,” secure, transparent, and convenient payment alternative backed by the U.S. Dollar.

However, Jay Hunter Anson, previously a vocal supporter of the project, took to X (formerly Twitter) to declare that PSC distribution would cease on September 8, only a few weeks after its initial introduction. Anson also revealed that following this distribution halt, Palau Stablecoin would be frozen, rendering it unusable for transactions from September 15 onwards.

The decision to halt and freeze the stablecoin has sparked widespread speculation in the cryptocurrency community about the undisclosed reasons behind it. Anson did not provide specific details but mentioned that a survey would be sent to all pilot program participants in the coming week.

He emphasized that user feedback would be crucial in shaping the final report intended for presentation to the Palau Congress and the President. Anson stated, “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 Ripple-based Palau Stablecoin was designed to operate on the Ripple Central Bank Digital Currency (CBDC) Platform, introduced in May. Ripple had previously claimed to be in discussions with over 20 governments regarding central bank digital currency issuance. However, the partnership between Ripple and Palau was established in 2021, with an initial launch target set for 2022.

The abrupt termination of the PSC project has left many questions unanswered within both the cryptocurrency community and Palau’s population. While the precise reasons remain undisclosed, the government’s decision to seek feedback via a survey suggests that the pilot program’s evaluation may have significantly influenced the outcome. Anson had previously indicated that the project would be assessed after two months, with potential expansion on the horizon.

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Saniya Raahath
Saniya Raahath

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