Nabilah S
Palau has made a significant leap in modernizing its financial infrastructure by launching “Palau Invest,” a blockchain-based savings bond system. This initiative, developed in partnership with Japan’s Ministry of Economy, Trade, and Industry (METI) and Japanese blockchain firm Soramitsu, enables Palauan citizens to invest in national infrastructure projects while earning returns on their investments.
Palau Invest aims to provide citizens with an easy, accessible way to contribute to the country’s development. The system allows them to purchase digital savings bonds, supporting critical projects such as roads, bridges, housing, and small-to-medium enterprise (SME) development. These projects are designed to stimulate job creation, foster business opportunities, and contribute to Palau’s long-term economic growth.
Speaking about the initiative, President Surangel Whipps Jr. highlighted its importance, stating, “The savings bonds initiative allows us to fund crucial projects like housing, SME development, and infrastructure with domestically sourced capital. By investing in these areas, we stimulate job creation, enhance business opportunities, and foster a vibrant economy.”
Minister of Finance Kaleb Udui Jr. echoed these sentiments, noting that Palau Invest is part of a broader financial strategy to increase investment opportunities for all citizens and strengthen the country’s financial system.
The blockchain-based savings bond system is built on the SORA v3 Hub Chain, leveraging the Hyperledger Iroha 2 network. This open-source blockchain platform has been successfully used in other Asia-Pacific nations, helping to create secure and efficient digital financial ecosystems. Soramitsu, the company behind the platform, has previously implemented similar systems in Cambodia and the Solomon Islands.
For Palau, adopting blockchain technology represents a transformative step toward reshaping its financial landscape. The integration of blockchain will streamline the investment process, reduce transaction costs, and ensure transparency and security for all participants. A public demonstration phase is already underway, allowing citizens to familiarize themselves with the system before the official bond issuance begins. Once fully operational, Palauans will be able to invest in national projects directly from their smartphones via a mobile app.
This initiative is expected to draw global attention, particularly from other small nations looking to modernize their financial systems. Japan, through METI’s Global South Future-Oriented Co-Creation Project, remains committed to supporting emerging economies like Palau in integrating cutting-edge technologies into their economic frameworks.
Meanwhile, Japan itself is preparing for a comprehensive review of its cryptocurrency regulations, led by the Financial Services Agency (FSA). This review could lead to a reclassification of cryptocurrencies as financial instruments under investment laws, potentially lowering tax rates on crypto gains from 55% to 20%, aligning them with other financial assets. Japan’s Digital Transformation Minister, Masaaki Taira, has emphasized the need for crypto tax reform, while incoming Prime Minister Shigeru Ishiba has revealed pro-blockchain and NFT policies aimed at boosting regional economies.
