Palau Ministry of Finance board member Jay Hunter Anson said the PSC testing started back in March, and over the past three weeks, the stablecoin has been distributed directly to project participants. The official explained that the PSC is considered a digitized prototype of the U.S. dollar, which was developed in partnership with Ripple using the XRPL blockchain.
On July 13, Anson became the first person to make a purchase using PSC, paying for breakfast at a participating vendor. The pilot project has since expanded to include more volunteers willing to test the government’s digital currency. On July 23, the second batch of PSC was distributed to 35 users.
It is also known that in the first phase of the pilot program, 200 Palauan government employees will be able to pay with PSC stablcoin for goods and services from registered local vendors. Given that Palau does not have a central bank, the country’s Ministry of Finance will be able to create, distribute, redeem and destroy PSCs.
The Ministry of Finance also guarantees reserves for PSCs in U.S. dollars at a 1:1 ratio. Through this pilot project, the Palau government aims to reduce transaction costs in making payments, as well as engage more citizens in financial services programs.
As a reminder, the Palauan authorities had planned to start working with Ripple as early as 2021, but the joint project was not announced until late last year.