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A Japanese fintech developer is set to create a blockchain-based bond market gateway for Palau, aiming for a trial launch in 2024 and a full roll-out the following year.
Japanese fintech developer Soramitsu, known for developing a central bank digital currency (CBDC) for Cambodia, will build this blockchain-based bond market for the Pacific island nation of Palau. Soramitsu has secured the contract and plans to introduce the marketplace on a trial basis in fiscal 2024, with a full rollout expected the following year. This will enable the Palauan government to issue bonds to individual investors and manage principal and interest payments efficiently.
The total project cost is estimated between $1.2 million to $5.6 million, which is less than half the expense of a non-blockchain alternative. This project has reportedly gained support from Japan’s Ministry of Economy, Trade, and Industry, with Japan’s foreign and finance ministries providing strategic and project management advice.
“Soramitsu’s successful development of Cambodia’s CBDC in 2020 has bolstered its reputation as the digital currency’s popularity surged, with over 10 million accounts opened by December 2023, accounting for 60% of Cambodia’s population.”
Later on, Cambodia‘s central bank governor Chea Serey indicated plans to expand its CBDC’s outreach internationally, particularly through a collaboration with UnionPay International and other global partners.
While Soramitsu’s work in Cambodia has been well-received, the long-term popularity of CBDCs remains to be seen. In late June, there was a sharp decline in activity for India’s digital currency, the e-rupee, after local banks ceased artificially inflating its metrics. According to sources, the Reserve Bank of India achieved a milestone of 1 million retail transactions last December only after local banks offered incentives to retail users and disbursed a portion of bank employees’ salaries using the digital currency.
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