Key Takeaways:
- Ripple partnered with the Republic of Palau to launch a U.S. dollar-pegged governmental stablecoin.
- XRP did not respond to the news, and consolidated, while flashing a bullish setup.
YEREVAN (CoinChapter.com) — Ripple, a San Francisco-based blockchain payment company, announced this week that it would create a U.S. dollar-pegged central bank digital currency (CBDC) for Palau. Meanwhile, the news little in boosting investors’ appetite for XRP, a cryptocurrency that works independently from Ripple but functions atop a decentralized public ledger of the same name.
Palau goes crypto
CBDCs act as a bridge between cryptocurrency technologies and central banks, enabling state-run institutions to create their private digital assets under proper regulation. As a result, such cryptos may appear the same in the line of decentralized assets like Bitcoin, but their economics appear the same as that of a government-backed fiat currency.
The Republic of Palau doesn’t have a native state currency. Instead, the coastal country relies on the U.S. dollar for all its internal transactions. As a result, they have decided to partner with Ripple to create a digitized dollar by deploying their underlying blockchain technology.
Meanwhile, the Palauan government officials also asserted that they have no intention to accept XRP or any other cryptocurrency as legal tender, unlike El Salvador. Instead, they would utilize XRP for faster transactions and create other services, including corporate registries.
Also read: Ripple launches crypto liquidity solutions to finance firms offering crypto trading.
The President of the Republic, Surangel S. Whipps Jr, noted asserted that adopting financial technologies could benefit Palau and make the Republic a desirable business partner.
As part of our commitment to lead in financial innovation and technologies, we are delighted to partner with Ripple. The first phase of the partnership will focus on a cross-border payments strategy and exploring options to create a national digital currency, providing the citizens of Palau with greater financial access.
he added.
According to an online CBDC tracker, Palau will join the 70 other countries developing CBDCs.
XRP mum to Ripple’s high-profile parternship
XRP remained under selling pressure in line with a similar downside sentiment across the top digital assets. The Ripple token closed last week at a 6% loss, but its sideways consolidation pattern kept rekindling hopes for a potential upside continuation move ahead.
Pennants typically occur after an uptrend (flagpole) and predict a breakout after the token exhausts the formation. If XRP complies, the target price could stand at $1.85, equal to the flagpole. Moreover, the said Pennant lies within a bigger Symmetrical Triangle, formed in early 2021.
While the formations look alike, the Symmetrical Triangle does not necessarily form after an uptrend. Thus, it doesn’t predict a specific vector after exhaustion. Nevertheless, as XRP is close to completing both formations, it could see a big move ahead during December.
Also read: SEC vs. Ripple drags on while the next big ruling might come in January, says attorney.
The Republic of Palau trusted Ripple Labs with developing a state-controlled stablecoin pegged to the U.S. dollar. The event marks the growing adoption of blockchain technology worldwide. However, it did not affect XRP. The token didn’t budge and still consolidated at $1.03 in the European session Thursday.
