The Pacific Island is building a position as a technology startup. It issues its own digital citizenship and stablecoins.
One of the youngest countries in the world is a small island located in the Pacific Ocean about 500 kilometers east of the Philippines. Palau, as this mini-state is called, offers the opportunity to acquire digital citizenship, which can be used to facilitate business operations and digital transactions. In addition, it also invests in its own stablecoins.
Until 1994, Palau was a trusteeship territory under the administration of the United States. The local political system now simultaneously mirrors the American system. The head of the country and at the same time the prime minister is the elected president. The legislative power then rests with the bicameral parliament. But that's not all. Palau, with only 20 thousand inhabitants, also has 16 federal states with their own parliament, constitution, government, and elected representatives.
Digital Citizenship
And right here, anyone who shows interest is offered a special digital citizenship for just under 250 dollars. The legal identity document, which the local government issues, is often used by those who use various types of online services and digital transactions and want to escape various types of regulations at the same time. The island, which in a figurative sense represents a revolutionary technological start-up, aims to transform into a new global financial center, based on the development of the global economy.
Holders of digital citizenship receive a physical ID card and digital identification, which ensures them the chance to conduct secure online transactions. A digital ID of a resident can be used anywhere where identity verification is required. That is, where an international bank account is needed. For example, at cryptocurrency exchanges, for checking in at hotels with discounts, future trading, opening a business, but also property purchase.
Stablecoin
Palau, which does not have its own currency or central bank, is also experimenting with its own stablecoin. The Palau Stablecoin is a digital asset that relies on a partnership with the American cryptocurrency company Ripple. It differs from other digital currencies in that its value is tied to a real currency, specifically the American dollar. However, this also carries the risk of leaving your country at the mercy of the inflation of the American dollar. Nevertheless, it is set for success: trading with it began on the XRP Ledger exchange in May this year.
On one hand, Stablecoin aims to facilitate the life of the island's citizens and at the same time diversify the local economy, which is otherwise heavily dependent on income from tourism. Government officials hope that this step will allow Palau's citizens to purchase goods and services solely via their mobile phones and that state employees will receive their wages immediately, instead of waiting several days for all the required transactions to be processed in the bank.
It should be added that countries' approach to cryptocurrencies varies. The first country to start accepting Bitcoin as legal tender was El Salvador. However, many other states are reserved about such a step. It fundamentally changes the foundations of local economies.
Building your own brand
Palau is also building its distinctiveness in other areas. For example, there are bans on sun creams that contain substances damaging coral reefs. These include commonly used substances such as oxybenzone, which absorbs ultraviolet radiation, and ethylhexyl. The international foundation dealing with the protection of coral reefs announced that these substances are “known toxins and most of them are extremely harmful to organisms at an early stage of their life.”
A similar ban here applies to plastic bags, specifically to the use, import and production of disposable plastic bags. This ban is part of Palau's broader effort to reduce plastic pollution and protect the environment, particularly the marine ecosystem.
Palau is an example of how even a small state can become known to the public. A confirmation of this fact is, among other things, that it has made it into the rankings of the world's largest brands. For the years 2024 and 2025, it was included in the Nation Brands ranking by Brand Finance.
The island is an example of how an unknown tourist destination can build a position that far exceeds the significance of the region where it is located. And therefore it undoubtedly deserves more attention than just as a place that attracts a great vacation.
Sources: author's text, Wikipedia, Czech Television, Palau Government, Bidget, Nation Brands
