Palau: Crypto Island (Documentary) featuring President Surangel Whipps Jr.

Here's a country that's trying to be at the forefront of things, issuing a Web3 ID, an actual ID card that you could mint as an NFT. This is a program from the tiny island nation of Palau. And it's an actual KYC document issued by a nation state, which you can use to verify, you know, wherever you are in the world. I had vaguely heard of the country before. It's a small island nation about, I think a thousand kilometers east of the Philippines, population around 20,000. I thought to myself, wow,

this is really cool. I'm gonna get the ID. So I did, it's really cool. They have various other bonuses and things attached to it. There's a lot of different things we could do in this space once you have a really good ID document. How did this come to be? And what are they planning to do next? This is something which I wanna find out more about. So we thought, let's get on a plane and go to Palau and go and find out. Look, I actually don't know what's gonna happen next. We're gonna talk to hope

fully someone in the government that can tell us a bit more about the program and why they're doing it. Voyage of curiosity to a tiny island nation in the middle of nowhere in the Pacific. This is gonna be exciting. There's only really two ways you can get to the island as well, by the way. I think there's an additional one by Guam. So I think it's Guam, Taipei, Taiwan and Manila. And the planes only fly in at like the start of the week and then fly out at the end of the week. That's how it is.

Made it to Taiwan, here in one piece. We're getting on a plane tomorrow, next day, something like that. We have a lot of different leads, a lot of different people to talk to, but we'll find out soon enough. Time to go for a walk, I think. It's good, it's free country, but it's really hot.So we made it to Palau. Quite a non-eventful trip. We came here in the evening. Really just sort of settling in. Today, we had the opportunity to go to the presidential place where they're doing the State of th

e Union address. We decided that actually, probably, it's much nicer to be out here. We're going to go and see essentially what Palau is doing this Web3 program for. They talk a lot in the documentation about saving the environment and their own eco-fund and so on. So a lot of where the money's going for this is to preserve their natural environment. The natural beauty of Palau is amazing. We saw turtles, we saw coral reefs, we went kayaking in pristine natural environments. So it really is an a

mazing place to go. And I guess what they're trying to do with the ID program is try and safeguard that. That will be interesting to meet the president tomorrow and really get to the bottom of why they're doing this whole Web3 thing.Of course, our strengths are we have a beautiful environment. And that helps us in the marine science exploration, the environmental fields, we get a lot of recognition for that. But that also translates into tourism. It also translates into a fisheries industry and

agriculture industry - how to develop that, use it sustainably? But we've learned from COVID that that's not enough. Like mostly hotels were closed. Completely no tourists. So when we closed our borders because of the pandemic, we basically lost our economy. We also borrowed money to keep people comfortable during this period of such unrest, you know. The other huge advantage that Palau has is it's small. It's an independent country. And being part of the world, we were able to maybe adapt and d

o things that larger countries may take more time to do. One of the areas that we've seen that has potential is the digital space, is the financial space. How to create an environment that attracts entrepreneurs, attracts new types of businesses that can really help improve the standard of living of Palauan people?We do have this natural limit on the number of tourists we can physically bring here. So what are the options? We do have very fast internet here. It's the killer of distance, right? C

onnecting Palau to the world. There is young Palauan that have gone to the U.S., gotten educated, and have jobs. Now, they've returned to Palau and are able to do their work remotely from Palau. That's what we want to see. 100%. What's holding us back? Right now, I don't see there's anything that's holding us back. We're gonna have fiber to the home all around Palau. Amazing. That should just open up that space. It's creating opportunities for Palauans to make them live the Palauan dream. That's

always been our motivation. So why not live in paradise and do your work? In crypto land, we're all about finance, right? So if there's more web3 products, if it starts with a digital ID, then it becomes company incorporations, then it becomes a VoIP numbers. A lot of people do that as well offshore. Maybe it becomes offshore financial services in like a free trade zone or something. I think all of these different things is probably where something like Palau can capitalize on having a low popu

lation, being able to do a lot with a little amount of people but also being able to generate money to preserve a beautiful environment like this. It's creating and finding that niche, right? And being different. I think the traditional model of offshore corporations has got a bad name. They just do this to evade taxes. We're looking at it differently. We're looking at it as how do we do it the right way and really attract businesses that truly are digital businesses that can be operating anywhe

re in the world? So why not Palau? That's what we're looking for. We want all these software, digital companies to be registered in Palau. Yes, I would love to do that. I would do that tomorrow. Yeah, because you can be registered anywhere and operate out of anywhere, so why not Palau? That's really the idea behind the digital residency is first, let's get the digital residency set up, then go to the next level. So there's actually a corporate registry act that we have. We're trying to modify it

to make it easier for people like yourself to sign up, get that corporation going in Palau. And I think it also brings opportunity. It doesn't have to compete with our physical visitors here. For instance, there was an idea that being able to sign in to a service and visit the site remotely, or have that as an interim visit to the country online. Yeah, like a live feed on a drone or something, right? Yeah. That'd be cool. So it does protect our environment, and we do need to protect our environ

ment. It's very fragile. We consider ourselves environmental champions in the Pacific. A lot of the smaller countries are advocating for keeping the global warming to 1.5 degrees Celsius. When climate crisis hits, it's going to hit us first. You know, so you'll get to see what happens live. So we need to do our part and be advocates to help everyone join the movement. Technology and the internet and fintech could be another way of sharing that message as being small but being leaders in this ver

y big space. The thing about FinTech is we do have Fin in our culture. Palau has its own monetary system, represented in some stone beads, that is part of a very elaborate system of exchange. There was some money that was used on a daily basis to buy bread, for instance. And then there were one that settled wars, and there were some that you could buy a house with. So, I mean, there were set values, depending on the money and the history of the money. The more exchange that was conducted also su

pported the value of that particular money, usually which most of them had their own names. So that's how you track the value of the money through the transaction chain. This particular symbol is a symbol of money, like US dollar symbol, but this one is Palauan symbol of money. This Bai, a men’s meeting house. It was like an insult if people in the village build their own Bai. Most Bai and also houses are built by other people. Oh, okay. So if they build it, they have to make it very nice so the

y can pay. So that's the whole concept. Only pay when it's been built? Very nice. Yeah. Here is an example of, say, the ceremony of buying a house. Now, buying a house would entail the usage of the stone money in some respects. There is someone who will make the money, put it in your stash, and you use that money to pay the fine. It's like the treasury of a government or something like this. Yeah. So it's embedded in our society as well, the concept of money and the value systems, not were the Y

apese stone money, which are, you know, very large pieces of rock. You know, represent a blockchain concept where the coin doesn't really move, but the title moves like on a blockchain is very innovative and was done many, many years ago. But also that Palau traded with Yap and allowed them to come here and mine that money. We're literally outside of one of the ancient stone money quarries. It's low tide though, so we can't actually get to the little hut and to go up and see it. This is a very v

aluable place. Between here and Yap, that's like 290 miles. And then they travel with a very small canoe to this place, to down there. And this is the map for the sites where they quarry the stone money. A lot of the value of the money was embedded in that experience of mining it in Palau and whatever costs were associated with minting the stone. This is it. Yeah. So, I mean, this is something that comes back to us. It's not something we have to learn. It's something that we already understand.

We've heard that there's a stablecoin kind of thing on the radar. Now, that's a path which is a long road. There's lots of different things that you have to keep in mind with stablecoins. Where's it custodied? Is it a trustless or trusted one? So why do a stablecoin? Yes, there's applications for our digital residents. But actually we're trying to launch it locally first. One of the biggest problems we have is we use US dollars here. And I come from the retail sector. One of our biggest problems

is getting coins. Because the banks, of course, have to bring these coins from the US. And who wants to ship pennies to Palau? It costs way more than what the penny is worth. But when we're operating a store and you don't have pennies, the customers are like, give me change. At one point, we ran out of pennies, so we're giving them candy. And they were yelling at us, you know? What am I supposed to do with this candy? Well, it's $1.20 and some candy. A couple pieces of candy, yeah. How do you s

olve those types of problems? And one way is to have a Make it digital. Make it digital. So, of course people have credit cards, but it's not easy to get a credit card in Palau. Yes, or anywhere really. Yeah, why not have this system that eliminates all that? So really a cashless economy, but based on the dollar. So that's really our application. So we're gonna start with a few people here, test it out, and add to that, hopefully we can prove that it works and then it goes global. And is that so

mething that is, you're looking to get local businesses on board for that? Yes. And how do you do that, I guess, as well? Or what's the thinking there? I remember this exact story of, one of my friends used to do money transfers for a lot of the banks between different Pacific islands. They literally had speed boats going between islands, like ferrying cash, because sometimes you just need cash in one location, right? So I totally get the digitization sort of initiative, but then it's kind of ho

w do you get people on board? Like if I'm in Guam or if I'm in the United States somewhere and I want to send money back to my family in Palau, and then for them to go and spend that at the local grocery store, not only do you need the grocery store on board, you need the individuals with a wallet on board as well. So there's a bit of steps in between the stable coin existing and getting actual traction for that. I guess, is that still a work in motion or do you have any sort of thoughts on when

the stablecoin might come to be? Exactly like that. We have islands and so they're literally transporting checks. They go over there and they have the cash and go back. We're hoping that that's the future is to eliminate all of that. And you know, we're small enough that we can demonstrate it. Start at step one, try the wallet, see how it works and then go to the next step. Tourism is great, but at the end of the day, it's still a low paying industry. It doesn't provide that financial stability

that people are looking for. We need more lawyers, we need more finance people, we need more accountants, we need more computer scientists. How do we create those jobs here? Why not all live in Palau and provide services around the world? That's really what we want is we wanna diversify, we wanna provide more high paying jobs. We like to say there's Singapore over here, we're a mini Singapore in the financial sector. There's Hong Kong. Palau is, you know, five hours from every major city in Asi

a, why can't it be a hub for some corporations, especially digital corporation? Why not Palau as the hub? I think it's good to get perspective of the place that you're looking at investing in. We are a very open country. We like to see a lot more people consider Palau. So we have a lot to show people, I think, as an example of an environmental custodian that's a lesson of itself. If you are interested in coming here, I mean, you can come in as a digital nomad. You can stay here for up to 210 day

s. We can help you out here. So we're about to board our plane back to Taiwan, and we're reflecting on the last five days and the journey thus far in Palau. Essentially, we started with this, was the digital residence program. And there's actually a lot of initiatives that come after that, right? We've got potentially company incorporations, freight forwarding, VoIP phone numbers, a lot of different things which are useful services for nomads, and the people in government have been thinking of w

ays that Palau can grow beyond just a small island nation of islands and a population of around 20,000 people. But there's a limit to how much you can do with such a small place. So these digital programs serve a really good purpose. I think it's a great revenue source and a lot of really friendly people, really intelligent people as well that we've interacted with over the last five days are involved in all of this. And I'm bullish on sort of seeing what comes next. And I think for our journey,

I think the digital residence program will continue to grow. It serves a real purpose. A KYC document, which you can use to verify yourself on exchanges and banks and whatever else anywhere in the world. This is a valuable service and this is also something that people will pay for. Any other services that add on to this are going to be, I think, utilized by the existing holders of the card and I think will attract many more people. So goodbye from Palau and we've got to catch our flight. So we

'll see you soon. Cheers.