Palau, a country in the western Pacific Ocean, is closing up its U.S. dollar stablecoin initiative which it pilot-launched in August.

Jay Hunter, a Palau Ministry of Finance member and the director of the digital residency program, said on X (previously Twitter) that the government will stop distributing the Palau Stablecoin (PSC) on September 8.

Following the distribution halt, Hunter stated that Palau Stablecoin will be frozen after September 15, making it unavailable for user spending.

“After Sept. 15, you will no longer be able to spend the PSC. This will give us time to process retailer redemptions before the pilot’s official termination at the end of the month.”

Hunter did not disclose specific reasons for freezing the stablecoin in his announcement, merely stating that the government will issue a poll to trial participants next week. The announcement came just a few weeks after the administration introduced PSC in late July.

"If we are authorized to move forward with the next phase of the stablecoin program, our collective lessons learned will shape the way ahead," the official stated. He went on to say that the feedback from users would be crucial in preparing the final report for the Palau Congress and the president.

The announcement comes shortly after Hunter published a research from the National Institute of Standards and Technology on stablecoin technology and related security concerns. The study, published in September, analyzed some of the requisite security and stability qualities and identified "18 potential issues in stablecoin implementations."

Sources:

https://cointelegraph.com/news/usd-backed-stablecoin-halted-after-palau-pilot

https://captainaltcoin.com/palau-makes-a-bold-move-to-freeze-ripple-based-stablecoin/

https://twitter.com/JHX_1138/status/1699650336581882041?s=20