Palau’s much-anticipated digital currency pilot, the Palau Stablecoin (PSC), has ended abruptly. The program, colloquially known as “Kluk” due to its bird emblem, was launched with much fanfare in July 2023. It promised Palau residents a transparent, secure, and zero-fee payment alternative backed by the U.S. Dollar.
Jay Hunter Anson, the head of Palau’s Digital Residency Office, made the unexpected announcement on X, the platform previously known as Twitter. He confirmed that the distribution of PSC would stop on September 8, rendering the stablecoin useless for transactions by September 15. This sudden decision has left both the crypto community and the citizens of Palau in bewilderment, especially given the initial excitement surrounding the program.
The digital currency venture was a collaboration between the Republic of Palau and Ripple, utilizing Ripple’s Central Bank Digital Currency (CBDC) Platform. This platform, introduced in May, was already in talks with over two dozen nations for similar projects. The partnership between Palau and Ripple dates back to 2021, with an initial rollout planned for 2022. However, the actual launch was delayed until July 2023, adding to the intrigue of its sudden discontinuation.
While Anson refrained from pinpointing the exact cause of the termination, he did hint at a forthcoming survey for all trial participants. He stressed the significance of their feedback, which will be instrumental in submitting a comprehensive report to the Palau Congress and its President. Anson believes that these collective insights will be crucial in determining the fate of any subsequent phases of the digital currency initiative.
The sudden cessation and the impending survey have sparked rumors about governmental influences on the project’s outcome. Previously, Anson had alluded to a two-month evaluation period for the project, suggesting potential expansion. However, those plans are now shelved.
The unforeseen conclusion of the PSC pilot has impacted Palau and cast a shadow over Ripple’s larger objectives in the realm of central bank digital currencies. The crypto sphere and the people of Palau now eagerly await more clarity on this matter.