KEY FACT: Palau has launched a blockchain-based savings bond system called Palau Invest, aimed at raising funds for infrastructure projects like housing, SME development, and roads. The initiative is supported by Japan’s Ministry of Economy, Trade and Industry and Soramitsu blockchain, and will allow Palauan citizens to purchase bonds through a mobile app. The bond issuance is expected to launch fully in 2025, and will operate on the Hyperledger Iroha 2 blockchain. Palau has also collaborated with Ripple on a US dollar-pegged stablecoin project and previously developed blockchain-based digital residency through Cryptic Labs.
Image Source: Soramitsu
Palau Launches Blockchain-Based Savings Bonds - "Palau Invest"
Palau, an island country located in the Western Pacific Ocean, has launched a novel blockchain-based savings bond system, known as "Palau Invest". Palau Invest is designed to boost funding for key infrastructure projects like housing, roads, and small business development while modernizing Palau’s economic landscape. The initiative, backed by Japan’s Ministry of Economy, Trade, and Industry (METI) and developed with Soramitsu, leverages blockchain technology to enhance transparency and access for investors. The launch was announced by Soramitsu in a blog post on October 7.
In collaboration with Soramitsu and Japan’s Ministry of Economy, Trade, and Industry (METI), the Government of Palau has officially launched a blockchain-based savings bond prototype system named Palau Invest, marking a significant step in proactively securing the country’s financial future. - Source
With Palau Invest, Palauans will be able to invest in these bonds via a mobile app, with the system set to fully launch in 2025. The initiative is built on the Hyperledger Iroha 2 blockchain and reveals the country’s forward-thinking embrace of blockchain in public finance. The bonds offer citizens a secure, digital platform for investments, shorten the process, and minimize costs. This project is part of Palau’s broader strategy to integrate blockchain into its financial systems, building on earlier partnerships like the one with Ripple to develop a USD-pegged stablecoin and blockchain-based digital residency services.
Schematic of Palau savings bond infrastructure. Source: Soramitsu
Palau Invest: A Leap in Web3 FinTech Solutions
The digital savings bonds will give Palauan citizens a simple way to invest in their own country while earning yield from the benefits of those investments. Funds raised through the bonds will be used to benefit Palau’s economic growth, which will lead to many trickle-down effects that will benefit all Palauans. It means investing in Palau, for Palau, and by Palau.
The launch of Palau Invest illustrates how Fintech is revolutionizing traditional finance by introducing cutting-edge solutions like blockchain technology in savings bonds. With the integration of blockchain technology, Palau is offering its citizens a secure, transparent, and easily accessible platform for bond investments, reshaping public finance.
This Fintech innovation will enhance efficiency by reducing intermediaries, cutting costs, and offering real-time tracking of investments. Palau's partnership with Soramitsu and the use of Hyperledger Iroha 2 showcase how blockchain can transform governmental financial services, merging technology with economic development initiatives.
President of Palau, at the Palau Invest launch ceremony in Palau on September 30th. Image Source: Soramitsu
Speaking at the Palau Invest launch ceremony in Palau on September 30th, which was held in conjunction with Palau’s 30th Independence Day celebrations, H.E. Surangel Whipps Jr., President of Palau, emphasized that Palau’s blockchain savings bonds will contribute significantly to national development, creating a win-win scenario for citizens and the government.
“The significance of this moment extends beyond the creation of a new financial product and digital platform. The savings bonds initiative enables us to fund key projects – such as housing, SME development, roads, and other essential services – with capital sourced domestically. These projects are not just critical to infrastructure, but they also generate spillover effects that ripple throughout and within our local economy. By investing in these areas, we stimulate job creation, enhance business opportunities, and foster a more vibrant economic environment. This initiative represents a broader effort by Palau to take greater control of its financial future – one where we determine the direction of our development and invest directly in our nation’s growth.,” said H.E. President Surangel Whipps Jr.
In the same vein, the Minister of Finance Kaleb Udui Jr., harpes the development as one of the goals at the Ministry of Finance to expand access to different financial tools and empower more citizens to invest in our nation’s development. He said the digital savings bonds will strengthen Palau's financial systems and improve access to investment opportunities for every Palauan.
Public Demonstration Phase Before Bond Issuance. Image Source: Soramitsu
on his part, Dr. Makoto Takemiya, Group CEO and Co-Founder of Soramitsu, who also spoke at the Palau Invest launch ceremony in Palau said that Soramitsu has successfully deployed blockchain-based financial systems across the Asia-Pacific region, including successful CBDC initiatives in Cambodia, Laos, and the Solomon Islands. He furthered that the Hyperledger Iroha-powered Bakong CBDC, in particular, processes more than $300 million daily.
"At Soramitsu, our mission has always been to leverage cutting-edge blockchain technology to create meaningful change in the world’s financial systems. The Palau Blockchain-Based Savings Bond project is a testament to how we can apply decentralized technology to bring efficiency, security, and transparency to national economies.
Takemiya added that working closely with the Ministry of Finance of Palau and Japan’s METI will revolutionize how nations manage their finances and take significant steps toward improving financial accessibility and promoting the well-being of citizens. Palau Invest is a bold move that can position Palau as a regional leader in blockchain adoption towards harnessing the cutting-edge technology for national progress.
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