Palau Launches Blockchain-Based Digital Savings Bond Initiative to Fund Infrastructure Projects

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The government of Palau, a Pacific Island nation, is trying out a new blockchain-based savings bond system. This initiative aims to raise money for essential infrastructure projects across its islands.

This week, they kicked off a public review of the digital savings bond platform. However, no bonds have been issued yet, according to Soramitsu, a Japanese blockchain solutions firm backing the project.

The funds raised from these bonds will help build bridges, roads, and other public infrastructure across Palau’s more than 300 islands. Palau President Surangel Whipps Jr. stated, “The savings bonds initiative allows us to fund crucial projects like housing, small and medium enterprise development, and infrastructure with domestically sourced capital.”

He added, “By investing in these areas, we stimulate job creation, enhance business opportunities, and foster a vibrant economy.”

The platform operates on the SORA v3 Hub Chain's Hyperledger Iroha 2-based network, developed in partnership with Japan's Ministry of Economy, Trade, and Industry (METI).

Palau plans to fully launch the digital savings bond system in 2025. Once it goes live, the roughly 18,000 residents of Palau will be able to purchase bonds through an app on their phones.

It’s still unclear how long the public review will last. Neither Soramitsu nor the Palau Finance Ministry has responded to inquiries from Decrypt.

Before officially launching the digital savings bond platform, the Palau Finance Ministry needs to finalize its bond issuance criteria and secure government approval.

Currently, Palau uses the United States dollar as its national currency and does not have an existing bond platform, according to Soramitsu.

Palau has previously engaged with cryptocurrencies and blockchain technology. In 2021, the government launched a dollar-pegged stablecoin project with Ripple. Additionally, in July, the country began implementing digital residence IDs on the Solana blockchain.