Palau partnered with Soramitsu for blockchain bonds; the Pacific Island nation, with a population of 18,000, is a leader in implementing blockchain technology.
Palau has engaged Soramitsu, a Japanese financial software company, to develop a platform for issuing and managing government bonds. The initiative is anticipated to commence trials this fiscal year, with a potential live rollout the following year. This is the most recent of numerous blockchain initiatives that the nation has funded.
The Nikkei reported that the contract was finalized in June and is valued at “several hundred million yen,” with 100 million yen equivalent to approximately $630,000. The newspaper stated that this is less than half the cost of a system that employs conventional technology.
The initiative will receive strategic and management advice from the foreign and finance ministries and assistance from Japan’s Economy, Trade and Industry Ministry.
Palau effectively implements blockchain technology.
Palau, which employs the US dollar as its currency, has yet to have a bond platform. According to The Nikkei, most of the country’s approximately 18,000 citizens, dispersed across 340 Pacific islands, utilize the services of US institutions. Consequently, the new platform will enable the government to access the savings of its citizens.
Palau has collaborated with Ripple Labs to develop a US dollar-pegged stablecoin on Ripple’s XRP Ledger central bank digital currency (CBDC) platform. The project was initiated in 2021 and advanced to the second phase of its launch program after 2023.
In January 2022, Palau implemented a digital residency program in collaboration with Cryptic Labs that utilized the privacy-protecting Root Name System. The system offers a non-fungible token associated with Know Your Customer verification, a blockchain-based ID. In June 2022, the program was implemented on the BNB chain.
Soramitsu assists with initiatives in the Pacific and Asia.
In November, Soramitsu supported the commencement of a CBDC proof-of-concept initiative in the Solomon Islands. In 2020, the organization played a critical role in establishing Cambodia’s baking digital currency, reminiscent of a CBDC.
The proof-of-concept of Laos’s DLak was demonstrated using the bakong as a model. The initiative was initiated in February 2023 due to a Memorandum of Understanding between the Bank of the Lao People’s Democratic Republic and Soramitsu.
In August, Soramitsu disclosed its intention to establish an Asian cross-border payment system employing the bakong and stablecoin. It also expressed the aspiration of establishing a stablecoin exchange in Japan.