Ripple, the digital payments network, has partnered with the Republic of Palau to help the Pacific island nation develop its own digital currency.

The first focus of the partnership will be the development of a USD-backed digital currency to facilitate cross-border payments for the country. The collaboration could, according to Ripple’s announcement, “see the implementation of the world’s first state-backed national stablecoin in the first half of 2022”.

Ripple suggested that the national digital currency doesn’t necessarily have to be just another CBDC.

“Ripple would provide technical, business, design and political support to Palau. In the meantime, examining a USD-backed stablecoin and its associated use cases – such as a business register – in the XRP ledger could be a viable alternative to central bank digital currencies (CBDCs) for countries like Palau.

Palau President Suangel Whipps Jr. said the national digital currency would “give Palau citizens better financial access.”

As an island nation, Palau is particularly vulnerable to some of the effects of climate change, and Ripple said it was one of the reasons it was selected for the job. The company said the XRP ledger is “carbon neutral and 120,000 times more energy efficient than proof-of-work blockchains.”

“We are excited to work with Palau to achieve its financial and climate goal,” said James Wallis, VP of Central Bank Engagements at Ripple.

“We have the wonderful opportunity to bring our technology and experience together with the unique properties of Palau to create real economic and social impact for the country.”

Ripple is no stranger to climate and environmental issues. In February of this year, it announced its goal of achieving net carbon zero by 2030, starting with making XRP carbon net zero using the EW Zero tool.

EW Zero is an open source solution from Energy Web that allows companies to buy tokenized renewable energy to become carbon neutral. Ripple also led a $ 44 million financing round for fintech provider Nelnet Renewable Energy to fund green initiatives in the United States.

Related: Bank of Russia Plans To Charge Fees On CBDC Transactions: Report

Ripple was busy clarifying its case with the SEC as to whether XRP tokens were issued as unregistered securities in 2013. Brad Garlinghouse recently said that he believes the case has made good progress and will close in 2022.

XRP is currently trading at around $ 1.05. That’s up 0.42% this week, but down 5.47% through November.

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