Palau Digital Asset Trading Center Launch: A New Chapter in Sovereign Compliance and RWA Implementation

October 10, 2025 – The Palau Digital Asset Trading Center (hereinafter referred to as "Palau Exchange") officially launched. At the same time, Palau Exchange announced that it will hold a global press conference on October 21.
As the world's first sovereign-backed comprehensive digital asset exchange, under the direct authorization of the Palau government, the platform is committed to exploring compliant pathways for the digitization of real-world assets (RWA) in an increasingly stringent global regulatory environment, with the vision of "Let Real-World Assets Flow Freely". As the global press conference on October 21, 2025 approaches, Palau Exchange is set to attract global attention from the crypto and financial industries, officially stepping into the international spotlight.

Blockchain Industry Background: A Watershed from Bubble to Restructuring

As of the third quarter of 2025, the global cryptocurrency market valuation is approximately over $3 trillion (based on public statistics). The continuous entry of institutions and traditional capital is driving the market back to value logic. At the same time, the global regulatory landscape has shown significant divergence: Hong Kong has introduced the VASP licensing system to strengthen compliance regulation; Singapore continues to improve its anti-money laundering and innovation regulatory mechanisms for digital assets; the U.S. and Nasdaq markets are increasingly strict on the securitization and disclosure requirements for crypto assets.

However, the industry still faces three core pain points:

• Assets lack real backing;
• Cross-border capital flow efficiency is low;
• User trust and compliance transparency are insufficient.

Against this backdrop, sovereign states intervening in digital finance based on regulation and resources has become a new direction for rebuilding trust. The birth of Palau Exchange is a practical attempt under this trend.

Compliance First: From Government Authorization to USD Clearing Access

Palau Exchange is formally authorized and regulated by the Palau Financial Services Authority (PFSA), making it one of the digital asset compliance pilot institutions led by the sovereign government of Palau. The platform fully implements KYC/AML standards, strictly adheres to the FATF (Financial Action Task Force) international anti-money laundering and counter-terrorism financing guidelines, ensuring transparency and compliance in all user identity verification, capital flows, and trading activities.
In terms of the clearing system, Palau Exchange has accessed USD clearing channels from multiple licensed banks, supporting compliant conversion between stablecoins and fiat currencies, providing foundational support for cross-border payments and RWA asset settlement.
The platform adheres to the core principle of "regulation first, technology support", balancing sovereign regulation with market efficiency, and has established a replicable compliance framework between regulatory sandboxes and open innovation, marking a key step for sovereign states in the digital finance field.

Initial RWA Ecosystem Implementation: Starting from Palau's Resources

The core strategy of Palau Exchange is to combine quantifiable local physical assets with blockchain finance. The first batch of RWA projects come from real industries, adopting a pilot-first, gradual expansion approach:

• rBLUE (Carbon Credit Assets): Collaborating with the Palau Ministry of Environment to advance blue carbon asset certification, with the first-phase project entering the preparation stage for launch;
• rFISH (Fishery Quotas): Partnering with local fishery associations to pilot the tokenization of fishing quotas;
• rLAND (Tourism Real Estate Revenue): Reaching intentions for revenue right tokenization with some resorts, expected to launch the pilot in Q1 2026;
• rSOLAR (Solar Energy Revenue Rights): Currently assessing the feasibility of on-chain implementation and matching with accounting standards.

These projects move the RWA concept from narrative to implementation, providing verifiable support for digital finance through real economic activities.

Dual-Token Economic Model: Dual-Driven by PLB and USDP

Palau Exchange adopts a "PLB + USDP" dual-token architecture, aiming to build an ecological cycle from governance to payment.

PLB (Ecosystem Token)
PLB is designed with "governance participation and ecosystem co-building" at its core, representing the participation rights of holders in platform governance, community proposals, and ecosystem incentives.
Its design philosophy draws on the share-equity parity structure, intending to achieve value alignment with the long-term development of the exchange through token mechanisms.
The first issuance plan has a total supply of 10 million tokens, with internal issuance and community incentive distribution already initiated.
Ecosystem governance functions (DAO module) are expected to be gradually launched in 2026, supporting voting, proposals, and proxy mechanisms to promote community participation in decision-making.
The platform emphasizes that the design goal of PLB is to incentivize ecosystem building and long-term value accumulation, not oriented towards fundraising or dividends.

USDP (Stablecoin)
USDP (Palau Dollar Protocol) is a compliant stablecoin developed in-house by the platform, pegged to the USD with 1:1 reserve backing.
This system has completed smart contract audits and trial runs, with future independent reserve audit reports to ensure transparency.
Enterprise-level settlement testing is planned to start in Q4 2025, with USDP focusing on serving trade, tourism, and energy payment scenarios within the region, and complementing stablecoin payment cards to improve cross-border clearing functions.

The establishment of the dual-token architecture enables Palau Exchange to form an ecological closed loop from asset on-chain, community governance to payment settlement within a compliance framework, providing a sustainable technological pathway for the integration of sovereign digital finance and RWA physical assets.

Team and Technology System: Building Trust with Professionalism

World-Class Team
The core team of Palau Exchange consists of multiple professionals who previously worked at institutions such as Binance, Coinbase, Sequoia Capital, and Nasdaq, with members having backgrounds in both blockchain and traditional finance. The team has extensive experience in financial system development, trading architecture design, and compliance management, providing institutional and technical foundations for the platform's security and transparency.

Technology System
Palau Exchange adopts a hybrid on-chain + off-chain clearing model to balance efficiency, transparency, and compliance.
Off-chain clearing is based on Kafka event streams to build a real-time clearing engine, used for high-frequency operations such as order matching, margin calculation, and profit/loss settlement. In the current testing environment, matching latency can reach about 1 millisecond, with peak TPS per trading pair achieving up to 100,000 levels.
The on-chain clearing part uses zero-knowledge proof (zk-SNARKs) mechanisms to batch submit daily settlement results to Ethereum L2 (such as Arbitrum), ensuring data verifiability while maintaining privacy.
The risk control system combines AML models with account graph analysis, capable of identifying abnormal trading and market manipulation behaviors, and supports on-chain tracking and post-audit.
The wallet system employs MPC multi-party computation solutions, combined with multi-signature and HSM hardware encryption, forming a multi-layered fund isolation and compliant custody system.
This system has been validated in internal performance tests and will be continuously optimized as business scales. By dynamically balancing performance, compliance, and security, Palau Exchange lays a robust technological foundation for the on-chain circulation of real-world assets (RWA).

Global Expansion: Expanding Markets with a Gradual Model

Palau Exchange adopts a phased opening, pragmatic internationalization strategy:

• Q4 2025: Launch the RWA section and initiate USDP stablecoin testing;
• First half of 2026: Open Southeast Asian markets and cross-border trading services;
• Second half of 2026: Explore establishing a Pacific RWA cooperation mechanism to promote regional stablecoin settlement interoperability;
• 2027: Introduce international custody and audit systems to further enhance transparency standards.

The platform has partnered with institutions such as Amber Group, GSR, and DWF Labs to provide liquidity and quantitative strategy support; and has established long-term cooperation with media outlets like Feixiaohao, Jinse Finance, Huoxing Finance, and Cointelegraph, focusing on expanding Asian and overseas markets.

Beyond Exchange: Building a Sovereign Digital Finance Ecosystem

The goal of Palau Exchange is not limited to trading matching but to gradually build a multi-dimensional sovereign digital finance ecosystem:

• Global Payment System: A stablecoin payment network based on USDP, serving cross-border settlement and consumption;
• Compliant DeFi Matrix: Launch staking and asset enhancement products linked with RWA assets, exploring on-chain revenue models;
• Asset Security Assurance: Improve the MPC wallet system and on-chain insurance mechanisms to enhance fund safety and risk protection;
• Ecosystem Node Plan: Use PLB to incentivize ecosystem participants for co-building and governance, promoting decentralized ecosystem growth.

This system uses RWA as the underlying asset, stablecoins as the circulation medium, and compliant finance as the institutional framework, laying the foundation for the sustainable development of digital finance.

Brand Philosophy: Rebuilding Trust with a Pragmatic Spirit

Palau Exchange believes that the true value of RWA lies not in conceptual innovation but in the reconstruction of regulatory transparency, asset authenticity, and institutional trust.
The platform will use sovereign authorization as its foundation to continuously promote RWA tokenization, cross-border clearing, and digital finance co-building, providing a verifiable and executable institutional model for the global financial system.
The launch of Palau Exchange is not just the birth of a trading platform but symbolizes the institutional exploration of sovereign states in the digital asset era—a real-world experiment from regulatory systems to asset circulation, perhaps outlining the blueprint for the future financial order.

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About Palau Digital Asset Trading Center
Palau Digital Asset Trading Center is established under the regulatory framework of the Palau Financial Services Authority (PFSA) and is a compliant digital finance platform promoted by the sovereign government of Palau.
The platform takes compliance as its core and RWA as the link, committed to promoting the deep integration of real-world assets and the digital economy. With the mission of "Let Real-World Assets Flow Freely", Palau Exchange has built a multi-dimensional digital finance ecosystem covering stablecoin USDP, ecosystem token PLB, as well as RWA trading, payment, and compliant DeFi applications.