• In January [2022], Palau launched the world’s first digital residency program using blockchain, underscoring its desire to create a new borderless financial hub relying on crypto and blockchain technology.
• Through a partnership with Palo Alto-based blockchain developers Cryptic Labs, Palau is launching the Root Name System (RNS), a digital residency program open to anyone in the world.
• Calling itself a “gateway to the borderless financial world,” the program gives approved users digital resident ID cards in the form of non-fungible tokens, allowing them to receive benefits in Palau’s new digital-first economy, which will offer services like physical addresses and shipping.
• [Palau] President Surangel Whipps Jr. sees the creation of the digital ID as one approach to diversify Palau’s tourism and fishing-driven economy, which was battered during the pandemic.
• The digital residency costs $248 per person, and the ID features important verification features like know-your-customer, anti-money laundering and anti-terrorism financing verification processes. It would be re-issued each year.
• “Our digital residency program will have capacity for internationally recognized standards of identity verification to ensure that Palau upholds the rule of law and our reputational integrity,” said Whipps, who is hoping the program will help the small island nation adopt a digital-first mindset like Singapore or El Salvador. “We welcome all global citizens to apply to participate in Palau’s digital residency program.”
• [as of February 2022] , the program [had] a waitlist of more than 60,000 people, with applicants allowed to move 100 spots on the waitlist through referrals.
• This is the second leap into blockchain for Palau.
• In November [2021], the country partnered with Ripple to create a USD-backed digital currency to facilitate cross-border remittances in an environmentally friendly manner. Ripple says its carbon-neutral blockchain network is 120,000 times more energy-efficient than others and offers lower costs and faster speeds.
• Cryptic Labs has not disclosed the blockchain protocol behind the digital residency program.

January 2022:  300,000 People Overwhelm Palau’s RNS Digital Residency Program

Cryptic Labs and The Republic of Palau launches the world’s first sovereign-backed blockchain-native digital residency platform

The entire joint press release from Palau and Cryptic Labs, worth the read: 

As a result of the Compact of Free Association signed after Palau’s independence from the United States in 1994, Palau residents enjoy access to a large number of US services, such as US postal services and zip codes, the US dollar as the official currency in the banking system, and US e-commerce such as Amazon, Walmart, and other retailers.

To democratize accessibility for individuals all around the world, Palau has joined hands with Cryptic Labs, an innovative blockchain research institute and commercial accelerator, to launch the Root Name System (RNS), the world’s first sovereign-backed digital residency program. Since the launch of the RNS waiting list mid-January, more than a quarter of a million people have already signed up for the waiting list.

The launch is a result of the Digital Residency Act, which the President of the Republic of Palau, His Excellency Surangel S. Whipps, Jr., signed into law last month after passing both the Palauan Senate and House of Delegates. The agreement signed between the government of Palau and Cryptic Labs allows individuals from around the world to apply for digital residency in Palau through the RNS platform, which is accessible at www.RNS.id.

“By pioneering digital residency on the blockchain, Palau is laying the foundation for Digital Residency powered by the security and end-to-end encryption of the Root Name System. Our Digital Residency Program will have capacity for internationally recognized standards of identity verification to ensure that Palau upholds the rule of law and our reputational integrity. We welcome all global citizens to apply to participate in Palau’s digital residency program.” – President Surangel S. Whipps Jr.

This launch marks the first time global citizens can claim blockchain digital residency backed by a sovereign entity, and individuals can apply for the digital residency through the RNS portal. Once approved, users receive a government-issued ID, both in the form of a physical card and digitally on the blockchain in the form of a non-fungible token (NFT). As an NFT, the RNS ID forms the foundation for legal identity and verification on chain.

Because it is state-issued, the ID is valid for any identification requirement, such as KYC. The RNS platform also gives users access to future services, including address and shipping services, and digital signature verification. The RNS system is designed with user privacy and security as a top priority, using end-to-end encryption so users control their information and identity exposure.

“This partnership with The Republic of Palau will revolutionize economic development both in Palau and around the world. Palau’s unique angle of entry to the digital economy will enable them to leapfrog legacy government services to meet the needs of global citizens. The world is beginning to recognize the practicality, versatility, and truly transformative power of digital identity – this is a swift step towards that future.” – Bril Wang, CEO Cryptic Labs.

The application process for new digital residents is a seamless Web3 experience, enabling users from around the world to apply and get approved from the comfort of their homes, and without having to travel abroad or to visit an embassy. Approval for the ID can take as little as a few minutes once users have passed an ID verification and AML check. The platform, which is now available for registration, is accessible to citizens from most jurisdictions around the world. Interested users can apply for Palau Digital Residency atwww.RNS.id.

About the Republic of Palau

The Republic of Palau is an independent nation with a global population of approximately 20,000. It is well-known as a top scuba diving destination and boasts a UNESCO World Heritage Site with a rich cultural history and treasured biodiversity, including its iconic Jellyfish Lake. The country has been a global leader in environmental conservation and climate change action. Palau has been praised by world health officials for swiftly instituting protections and mitigation measures to address the global pandemic and secured one of the highest vaccination rates in the world.

About Cryptic Labs

Cryptic Labs is a leading Innovation Lab and Advisory for Blockchain, Security, Privacy, and Trust. The team is composed of a diverse group of technology experts with deep expertise in blockchain, security, and privacy, including the founding CTO of IdentityMind (a world-leading KYC company and identity provider of Coinbase), the director of Stanford Federal Credit Union, two Nobel prize Laureates and professors from North America, Europe, and Singapore. (Source: Cryptic Labs) 

Source:  Jay Hunter Anson

Source:  Oleg R. 

https://medium.com/@ilaNihas/exploring-palaus-digital-residency-program-8e1dab28b89d#:~:text=Palau’s%20Digital%20Residency%20is%20based,access%20to%20economic%20freedom%20worldwide.

Featured Image Source:  The Flag of Palau 

What Next?   

The OODA Loop Digital Self-Sovereignty Research Initiative:  Digital self-sovereignty is the new “build”  as legacy systems get swapped out in a sometimes violent, always exponential fashion. To be clear, we are positioning digital self-sovereignty as a solution to our current problem set that will “still stand” even if this current geopolitical, exponential technology-driven inflection point manifests  – for a prolonged period  – as dark age-esque global societal systemic failure (per The Ministry of the Future). Ironically, this same uncertainty, chaos, and violence are the primary drivers (and new incentive structure) behind this new system’s development.  In this post, we “set levels” and offer working definitions for our forthcoming Q324 (going right into OODAcon 2024) series of posts as part of our Digital Self-Sovereignty Research Initiative. 

Digital Residency Programs

A concept that is gaining traction in the digital identity space is intimately connected to the principles of digital self-sovereignty and self-sovereign identity (SSI). These programs represent a forward-thinking approach to managing and interacting with digital identities, offering a structured yet flexible framework that aligns with the autonomy and control promoted by SSI.  At its core, a Digital Residency Program can be seen as a formalized system where individuals or entities are granted certain rights and privileges within a digital ecosystem, akin to how physical residency works within national borders. This concept extends the idea of self-sovereign identity by allowing individuals to control their personal data and providing them with a recognized status in digital spaces that can come with specific rights, responsibilities, and benefits.

For example, consider a scenario where a Digital Residency Program in a smart city allows residents to access municipal services through a decentralized digital identity. This identity would be managed by the residents themselves through SSI principles, using technologies like DIDs and Verifiable Credentials. Residents could interact with various city services—like public transport, healthcare, and voting—seamlessly and securely without the need for intermediaries. This setup enhances privacy and efficiency and reduces the risks associated with centralized data management.

These programs can foster innovation in how services are delivered. By leveraging the autonomy provided by SSI, Digital Residency Programs can facilitate unique, user-centric service models that traditional residency systems constrained by geographical and bureaucratic boundaries cannot. This could lead to more personalized and accessible services tailored to the needs and preferences of each resident.

The implementation of such programs is not without challenges. It requires robust technological infrastructure, clear regulatory frameworks, and a shift in how we perceive and value digital identities and residency. The success of these programs would largely depend on the interoperability of the technologies used, as well as the trust and participation of the residents.

Integrating Digital Residency Programs with the concepts of digital self-sovereignty and self-sovereign identity could significantly impact how you design and manage digital interactions and services. It could provide a more structured yet flexible framework for user engagement and data management, aligning with broader trends towards decentralization and user control over personal data.

The Blockchain-based Root Name System (RNS) is Poised to Swap Out Traditional Domain Name Systems (DNS):  The blockchain-based Root Name System (RNS) leverages blockchain technology to manage domain names in a decentralized manner – and is the core design and technical element of this blockchain-based use case, The Digital Residency Program of the Pacific Island Nation of Palau.  Find an overview of RNS here. 

Additional OODA Loop Resources

For our News Briefs and Original Analysis research efforts to date on this topic, go to OODA Loop | Digital Self-Sovereignty

Related topics include:    OODA Loop | Blockchain    OODA Loop | Trust      OODA Loop | Zero Trust    OODA Loop | Trustworthy AI

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