The government of Palau, in partnership with global fintech company Soramitsu and Japan’s Ministry of Economy, Trade and Industry (METI), has introduced a prototype for a blockchain-based savings bonds system called Palau Invest. This launch is a notable step forward in Palau’s efforts to secure its financial future and empower citizens to invest in the nation’s growth through digital savings bonds.
Palau Invest, as described by Soramitsu, offers Palauan citizens a new opportunity to invest in their country while benefiting from the returns on these investments. The system aims to support national infrastructure projects, such as the construction of bridges, roads, and public facilities. These investments are expected to contribute to Palau’s overall economic development, with positive ripple effects reaching all citizens.
The savings bonds initiative is part of METI’s “Global South Future-Oriented Co-Creation Project,” which highlights Japan’s commitment to fostering the development of emerging economies by applying advanced Japanese technology. Through this initiative, Japan continues to play a significant role in empowering nations like Palau by providing access to cutting-edge technological solutions for economic growth.
Empowering Palauan Development
Palau’s President Surangel Whipps Jr emphasized that the savings bonds system enables the country to fund vital projects, including housing, small and medium enterprises (SMEs), and essential services such as roads and infrastructure. He pointed out that the capital for these projects is sourced domestically, allowing Palau to foster internal economic growth rather than relying solely on external sources. Whipps further noted that investments in these areas would create employment opportunities, encourage entrepreneurship, and contribute to a more vibrant economy.
He also stated that Palau Invest reflects the country’s broader effort to take greater control of its financial future. By offering this new digital financial product, Palau aims to direct its development and strengthen its national economy through internal investments. According to Whipps, this launch represents more than just the introduction of a digital platform; it signifies the nation’s commitment to charting its own financial path.
In line with this, Finance Minister Kaleb Udui Jr shared that expanding access to various financial tools has been one of the ministry’s ongoing goals. The digital savings bonds platform, in particular, is seen as a key initiative to enhance financial inclusion for Palauan citizens. Udui also highlighted that this project is part of the broader efforts to improve the financial system in Palau, making it easier for residents to invest in the nation’s development and contribute to its growth.
Harnessing Blockchain Technology for National Progress
To ensure that Palauan citizens fully understand the digital savings bonds system, the government has plans to conduct public demonstrations, helping individuals familiarize themselves with the platform before it is officially launched. Once the bond issuance criteria are finalized and approved by the Finance Ministry, Palauan citizens will be able to purchase bonds through a mobile app, making the process accessible and convenient.
The blockchain app will operate on the SORA v3 Hub Chain’s Hyperledger Iroha 2-based network, an open-source blockchain platform known for its ability to handle decentralized applications efficiently. Soramitsu highlighted the innovative capabilities of the Hyperledger Iroha 2 technology, noting that it meets the needs of Palau’s transactional demands. The use of the SORA v3 platform also allows Palau to issue these blockchain-based bonds without incurring high infrastructure costs.
Soramitsu has previously implemented blockchain-based financial systems across the Asia-Pacific region, including successful Central Bank Digital Currency (CBDC) initiatives in Cambodia, Laos, and the Solomon Islands. The Bakong CBDC, which is powered by Hyperledger Iroha, handles transactions exceeding $300 million daily, demonstrating the platform’s reliability and efficiency. These projects reflect a broader vision of creating a shared financial system across Pacific Island nations, offering modern financial services at reduced costs through blockchain technology.
Makoto Takemiya, co-founder and CEO of Soramitsu, stated that the fintech company is committed to utilizing cutting-edge blockchain technology to effect meaningful changes in global financial systems. The Palau Blockchain-Based Savings Bond project, he noted, exemplifies how decentralized technology can enhance the efficiency, security, and transparency of national economies. Takemiya emphasized that by collaborating with the Ministry of Finance of Palau and Japan’s METI, Soramitsu is contributing to the evolution of financial accessibility while promoting the well-being of citizens.
The launch of Palau Invest marks the beginning of a new era for financial accessibility in Palau, demonstrating how blockchain technology can be leveraged to reshape the management of national finances for the public good. The initiative underscores the potential of blockchain to drive economic growth and foster long-term sustainability.