During a live panel led by Joanna Ossinger, a senior reporter at Bloomberg, Palau president Surangel Whipps Jr. explained how the country is working with Ripple to create a stablecoin for the island nation and attract new businesses from around the world to take part in a plan to develop a web3 economy. 

Creating a stable coin 

Whipps said during the panel that their government has been working in collaboration with Ripple to create a stablecoin to assist their push towards a more digital economy. They are designing a stablecoin that will be pegged to the US dollar; they have also given thought to creating a Central Bank Digital Currency (CBDC).

Whipps explained that Palau lacks a central bank and uses USD as its official currency. By developing a stablecoin, he is curious to explore the ability of developing a CBDC for the country which could help the country as it tries to attract more blockchain and FinTech businesses.

Small country needs innovation

According to Whipps, Palau is a small country and needs to find new ways to sustain its economy. Web3 helps solve this problem because blockchain business models are not hindered by geographical challenges such as a lack of resources or residing in the middle of the pacific ocean. 

To bolster this shift, the president signed the Digital Residency Act in 2021 which allows people from around the world to apply for residency within the nation. Records are stored on-chain and offer significant advantages for people seeking to do business from the island of Palau with discounted rates on services and visas, including a physical government ID as well. 

E-Corporations

During the panel, Whipps emphasized the need for e-corporations. To support this expansion digital residents will also be able to incorporate their businesses within Palau with lax laws and regulations, including a 0% taxation rate. This includes businesses of all types such as C-corps, LLCs, trusts, and DAOs.

Whipps mentioned that he had been working with CZ to develop the strategy. With his experience, they have been able to create a network that is capable of handling the onboarding that Whipps hopes to see in the future and also offer Binance services to the nation’s residents as a way to use their cryptocurrencies through Binance Pay. 

RNS Platform

To make everything possible, the nation has begun using the Root Name System which is labeled as the first on-chain ID platform to be used by a sovereign nation. The application of this system puts into effect some of the bolder NFT utilities because tokenization is how identification is stored on the blockchain. 

While only a small nation, the RNS.ID proves a significant point - blockchain technology has the capability to create financial freedom around the world so long as there is an internet connection. The potential for web3 business is still ripening and it is becoming clear to smaller nations that lack the means to grow through traditional means that decentralized finance is one of the best opportunities to improve their local and international economies together.