Despite these difficulties, Ripple is determined to continue its quest to be a major player in the global payment industry. Even though relations with the United States aren’t going well, Palau sees Ripple as the best option for developing a national currency that is based on U.S. Dollars.
Ripple shared a Press Release stating that Palau selected the XRP Ledger in order to create digital dollars for internal circulation within the country. Ripple explained that the idea is to create a USD-backed stablecoin, around which other services, such as corporate registries, could be developed.
Palau is Ripple-Friendly, But Not Enough to Adopt XRP
Palau doesn’t have its own fiat currency. El Salvador’s citizens also use the U.S. Dollar as their legal tender. The small island in Oceania, however, does not wish to accept XRP or any other cryptocurrency as legal tender. Instead, it hopes to issue a government-managed digital copy of the U.S. Dollar.
Palau’s initiative is more like a stablecoin issuance than a CBDC. It makes sense considering that Palau doesn’t have a Central Bank.
Surangel S. Whipps Jr, president of Palau, was positive that Ripple would provide the technology needed to create a financial product that is tailored to his needs.
Ripple is a great partner as part of our commitment in financial innovation and technology leadership. The partnership’s first phase will be focused on cross-border payments strategies and exploring the possibilities of creating a national digital currency to provide Palauans with greater financial access.
Ripple is committed to maintaining a cost-effective, efficient, carbon-neutral and fast blockchain network. Ripple shared a note explaining that Palau would be able to settle all transactions in 5 seconds. The cost of the XRP Ledger is not even one cent per transaction.
Ripple’s Regulatory Problems
It seems that the news has done very little to affect the price of XRP (the native cryptocurrency of Ripple’s XRP Ledger).
In just 3 weeks after the July 2021 surge, the XRP fell nearly 34%, from $1.4 to $0.86. It has traded sideways since then, but it was unable to break the $1.2 resistance or the $1 support.
XRP saw a 2.97% increase in price from $1.03-$1.06. Its current price of $1.045 is a decrease of almost 2%. This again shows the token’s lackluster trend.
Prices of Ripple’s 24-hour candles XRP. Image by Tradingview
Ripple’s regulatory issues are likely to be a major reason for this hesitancy.
Currently, Ripple is being sued by the SEC for selling XRP to unregistered investors. Ripple is currently defending itself but this case has been a significant blow to its reputation and, consequently, that of its token XRP.
The XRP token was once ranked among the Top 3 in market capitalization. It is currently at number 7. And the token’s once-dominant fan group, the XRP Army is almost dead on Crypto Twitter.
Marla Brooks – Financial Analysis
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