Palau Launches Blockchain-Based Savings Bonds System

According to Cointelegraph, the government of Palau has introduced Palau Invest, a blockchain-based savings bonds prototype system. Following the completion of the prototype, a public demonstration system has also been initiated. The project is supported by Japan’s Ministry of Economy, Trade and Industry and the Soramitsu blockchain, aiming to fund the country’s infrastructure projects. The Finance Ministry is tasked with finalizing bond issuance criteria and obtaining government approval. Approximately 18,000 Palau citizens will be able to purchase the bonds through an app on their phones. At the launch ceremony, President of Palau Surangel Whipps Jr. stated that the savings bonds initiative will enable the funding of key projects such as housing, SME development, roads, and other essential services with domestically sourced capital. These projects are critical to infrastructure and generate spillover effects. The bond project was initially announced in July, with hopes for a full launch in 2025. Palau, consisting of 340 islands in the South Pacific, uses the United States dollar as its currency and previously had no bond platform. The Palau bond will operate on the public, permissioned Hyperledger Iroha 2 blockchain on the Sora v3 Hub Chain platform. Soramitsu developed Iroha and contributed it to the Linux Foundation Hyperledger Project, continuing to provide technical and business support for the blockchain. The Polkaswap decentralized exchange operates on the Sora blockchain. Soramitsu is also involved in Cambodia’s Bakong currency, Laos’s DLak central bank digital currency (CBDC) proof-of-concept, and the Solomon Islands’ Bokolo Cash CBDC proof-of-concept. The DLak was modeled on the Bakong. Palau has had a joint project with Ripple to launch a US dollar-pegged stablecoin since 2021. After the first phase of the project was declared a success at the end of 2022, it progressed to its second phase a year later. Additionally, Palau and Cryptic Labs developed the Root Name System (RNS), the basis for the country’s digital residency program, early in 2022. The RNS provides blockchain-based ID with Know Your Customer verification as a non-fungible token, and the program launched on the BNB Chain in June 2022.