This transcript of the podcast was auto-generated and may include typos
Balaji Srinivasan 00:00
Welcome to The Network State Podcast. I'm here today with our first head of state, a leader of a UN member country. President Surangel Whipps, Jr. of Palau. Palau is a small country in the South Pacific that has nevertheless established diplomatic relations with more than 100 other countries, including the US, Australia, India, Israel and the UAE plug gained independence in 1994. And it's recently been gaining momentum as a startup country and tech pioneer. In fact, President whips is himself a former executive, and he's brought that DNA with him to the presidency. He's going to talk to us today about Palao’s tech initiatives, including their new digital ID program, which combines an offline ID with an on chain identifier. Joining us is also William Wang, founder of the RNS.ID service that Palau uses provide digital identifiers. PLA digital IDs are now being issued to venture capitalist Tim Draper, Ethereum founder Vitalik Butyrin, Binance’s CZ and many more besides, our discussion today begins with an introduction to Palau. An overview of everything it's doing in tech from digital ideas to stable coins to a possible on chain corporate registry. We then talk about how small countries have punched way above their weight, from Estonia, to the Cayman Islands to the early us to Palau itself, and we discuss why Palau chose to become its own independent country with its own culture and sovereignty, rather than becoming just part of a larger unit. At the end, President whips rolls out the red carpet. If you're a digital nomad with remote income. You're welcome to come there to come visit Palau and see what start country looks like in person. Let's get started. All right. Well, we are back on the network's a podcast. I'm here with a head of state, the President of Palau. And please tell me if I pronounce this correctly, Surangel Whipps, Jr. and also William Wang, who's the founder of cryptic labs and is built an artist ID program that Palau is using tissue a new kind of digital ID, they get all the pronunciations Right. Was that right?
Surangel Whipps, Jr. 01:55
That's correct. Perfect. So I'm Surangel
Balaji Srinivasan 02:02
amazing. So you know, you are the head. You're the president of the country of Palau. Many people haven't yet heard of Palau. Do you want to kind of put on the map for us? Tell us what it's about where it is, you know, its history, all that type stuff?
Surangel Whipps, Jr. 02:16
Well, probably the reason they haven't heard about Palau, if you look at your glow behind you, if you go to look for it on the globe, it's very hard to find. Most globes don't show it if they're small. You know, it's a very small island. It's about 454 square kilometers of total land area. To give you a perspective, actually, it's about the size of Singapore before they filled it all the area around it. You know, so it is it is small, in a sense geographically, but we are what we consider ourselves a large ocean state. The ocean area that we cover is the size of France. Your perspective, we're in the western Pacific, our borders our ocean and our islands border, Indonesia, the Philippines, on the west and south, and then on the east. Micronesia fry, like to tell people that were five hours by plane from every major city in Asia, Beijing, Seoul, Tokyo, Singapore, well, I guess, eastern Asia, southeastern Asia, so because Dubai is also Asia, but they're eight hours. So we are small. We only have 20,000 people. That's our current population. We became independent in 1994. We were prior to that utrust territory of the United States. So Palau, the people have lived here for 1000s of years. They have some terraces that go back 3000 BC, is what they say. But the really the first discoveries happened around of Westerners to Palau first coming flopping around the 1500s. So they were the Spaniards that first came, and then later, Captain Henry Wilson on a freighter coming from England.
Balaji Srinivasan 04:20
When was that like? 17 hundred's?
Surangel Whipps, Jr. 04:22
1717 83. Okay. That was he shipwrecked. That's how you discovered Palau. And the height here, helped him rebuild his boat, and in fact, sent his son back with him to England. He was, we could say our first ambassador to Great Britain. And he's buried in London and Rotter height in a church there because unfortunately, when he got there, he got the black plague. Oh, well, that's bad typing. Yes, we made it back to Palau. But so because of the Spaniards first discovered us from you know, they claimed us to be their territory and, and they brought missionaries here. And so we were under Spain until 1898. And then we were sold to the Germans in 1898. And we stayed under the Germans until the end of World War One. And at the end of World War One, then we were then given over to the Japanese, who are under the League of Nations took over Palau. And then after World War Two, given to the United States to be a Trust Territory. But the Trust Territory agreement or you know, under the UN, was that the you know, the United States would help these islands develop economically, socially, politically, so that they could eventually become independent nations. So in 1994, Palau fully gained independence from the United States, and became a member of the UN, we are one of the least populated nations on earth. I think we're third, I think, ranked, there's Tuvalu and now we're maybe ahead of us on that list.
Balaji Srinivasan 06:03
Well, it's interesting. I mean, they're also kind of in your general vicinity, right? Like, you know, evolutionary also Federated States of Micronesia, and so on a bunch of small Pacific islands, kind of countries there that are probably a little bit of a social network. And, you know, my understanding is, you know, when you got independence in 84, the US was sort of like a, like a great power sponsor, right, because there's kind of a military, you know, relationship. And then on that same day, like, the us recognize you, Micronesia, Papua New Guinea, and Australia, so several of your neighbors, and then around just a few weeks later, so it was kind of a, it was an important moment where you got diplomatic recognition from a big country early on, and that was what got you on the path to sovereignty, is that correct?
Surangel Whipps, Jr. 06:48
Yeah, that's correct. And now we have, of course, remember the UN. And we have diplomatic relations with over 105 countries now. So that's amazing. And this keeps growing and we make new friends every year. And, you know, it's, for a small nation, to be recognized for its sovereignty is important. You know, we weren't sovereign before the Colonials came and claimed us. But we had for generations had our own customs and practices and way of doing things. One of the things that we advocate for on the world stage is our conservation ideas. For 1000s of years, you know, we, we've protected our reefs, we manage our resources, through our traditional methods with chiefs and, and the chiefs would say, No hunting here, no fishing here for a while, let it rejuvenate, let it build back. And then let us you know, live here sustainably for the 1000s of years. And some of those principles that we continue to apply in this modern age, that we're trying to combat climate change and, and protect biodiversity. So it's interesting how things come back in, in vogue or, you know, but, you know, we're we're fortunate that our ancestors practice these things. The other thing that I don't know if you know about Palau is also well known to be having have been the place that yuppies stone money was mined. All the stone money that's known about in Yeah, was mined in Palau. And that money wherever it is, has as a as a story. And as a history
Balaji Srinivasan 08:35
is very important in cryptocurrency actually is like, it's like one of the things about the origins of money. Do want to tell that story.
Surangel Whipps, Jr. 08:40
Yeah. So we have limestone hills here. Yep, doesn't have limestone. So the sailors came down from Yeah, made friends with the chiefs of Corona, and IRI, and stayed here for months on end looking, it's like, it's almost like crystal inside the caves. And then they they would they would find the vein, and then they would carve them out. And then they put them on, you know, these big disc, some very big, some small. But the value had to do with how many lives how much, you know, effort went into making them and then transport them back to Yap, which is about 300 miles from Corolla. And you think in a small canoe, and some of these disk are eight feet in diameter. So they're, they're big. And then there's, you know, there's somebody say there are between here and yeah, and they have a story for that. And there's ones that are still here in Palau. And there's a story for that. So that's why we're always here. That's the original blockchain. Yes. Yeah. And Palau has, so Palau I say innovated one step further than that, because Palau said that money is just too big to transport around. So we went with smaller money. And our money is actually we call them beads. So these beads there's some that are orange in color, yellow goo Read with a white on him. And, and so these beads there and they were used to be traded to buy a house by a canoe, a marriage settlement at a funeral. And those beads had value assigned to them. But that value was a lot of it had to do with what funeral took care of what house had bought, what canoe it bought. And so that recorded history was also our blockchain, but because they were small beads much easier to transport. And, and much easier to move around. And now, of course, now we can do everything digitally. So that's even better, right? We don't have to worry about moving around, because we can keep it all on the blockchain.
Balaji Srinivasan 10:40
Well, you know, immediately our audience will be thinking, How is it? How do you you don't have a lot of heads of state are not conversant with technology, and are conversant with this, but you actually have a background in business actually also have an American ish kind of accent. Right? When in English, right. So John, talk about that, like, you know, your business background, your your kind of us relationship?
Surangel Whipps, Jr. 11:02
Well, you know, my father, when he left Palau, his goal was to get an education, the United States, and he joined the US military and ended up being in the Army, and ended up working as a medic in the US Army in Baltimore, got the GI Bill and went to college. But because of that experience, he of course, met a young lady, young lady from Maryland, who was my mother. And so I have the I have the opportunity to speak English and Palauan. But you know, in our constitution Pologne in English are our official languages, because it's taught in schools, but I have that extra benefit. By you know, so I was educated here in Palau. Of course, for universities, we don't have four year universities here. So we had to go to the United States, I was fortunate to go to college and get a degree in economics, and further my further and get an MBA from UCLA in 92, and then returned back home to really run and help grow our family business, which were in retail construction. And, and before I decided to go back in and do my part in helping the public and serve the people. One of the things I learned when I went to grad school is, you know, we MBAs, you're you're always getting educated. And your goal is, is to make money. But it's it should be more than making money, it should be about giving back. And being responsible citizens. And this is one way I can get back. And I had the opportunity when I was there at UCLA to get a fellowship, it was called MBAs and government. So we went to DC for the summer, which was a great experience. And at that time was one the, the savings and loans had failed. And, and they were saying, Oh, you can come to work for the RTC and helped SNL is and all that. But anyway, I said, No, I'm going back home, because I'm going to help Palau develop to be a successful country
Balaji Srinivasan 13:09
to those nine, Swain. 16. You were your sender? And then you were elected as president? 2020? If I'm if I'm not mistaken. Correct. All right. Got it? And did you? You know, were you How did you get into technology? Originally? You know, William did? Did you, you know, talk to the President about crypto or how did that whole thing kind of happen?
Surangel Whipps, Jr. 13:32
Well, you know, one of the things that we've always been, we've always believed when I was in the Senate is, is we've got a we've got to diversify our economy. We cannot be just dependent on tourism. And what just, you know, prove that even more, more is our experience with COVID, you know, are just wiped out our economy, because we depend on so much on tourism. And so while while I was in the Senate, you know, one of the things that I was trying to do is get our local bank to be be able to accept deposits move to the next level, improving the financial sector here, also improving the corporate environment to attract foreign investment. And, you know, one of the things we passed in, when we were in the Senate was the shipping registry law, so that we can register ship so it's, it's looking for other other industries that a small island can can maybe help promote, and help provide sources of revenues to help the economy. So when I ran for President, one of the things I said is, we have to develop our financial industry. And let's find ways that we can do that. And I don't think the blockchain and digital currencies and these kinds of things were actually on my mind. No, it was really the introduction of people like Brill and others Because that really helped bring us together and put us on this path. And it's really learning from them learning from William, on, you know, their vision about freedom. And, and how how blockchain and and this really just unlocks freedom and gives you that opportunity. The idea of digital nomads, you know, I was in Hawaii last year and and I was just going around, and there's so many digital nomads staying there because they were there, right? They have run away from COVID and move to Hawaii. Well, why not move to paradise? Why not move to Palau and do the same thing? You know, these are models that we need to look at. So having digital nomads move to Palau developing the digital residency program, developing a digital corporate registry. These are things that, you know, we think there's opportunity there, that, you know, we can create a space where entrepreneurs can grow. And you know, America is successful, because it's, it's the land of opportunity where you can dream the impossible. So we want to be that home for the digital world, right? Come here. But But what you know, what we've been very, you know, we've been very careful where we, we don't want to step in any potholes that would make it, you know, difficult to transact transact business around the world. So where we study, we try to say, Okay, let's do this project. Let's add on another phase and other phase, William has been a great partner in this. And maybe he can share a little bit about his, what he's done to date. But we that's just kind of our thought process. And we want to attract investors, really entrepreneurs that have great ideas that can help us grow this digital space, and create opportunities for people. So
Balaji Srinivasan 16:51
well, that's great. And I know actually, US citizens can kind of move to Palau and check it out for I think, up to a year as a tourist, is that right? And then they'll like, kind of a long term kind of pass. So let's say you were a digital nomad, you did want to move to Paradise, or at least check out Palau. You go and check it out. Now, if you you know, go if you've if you've got a password that gets you there. And then is there is there a way that they could be there indefinitely? Or is something where you expect them to be there? Let's say three or six months out of the year? How are you thinking about that?
Surangel Whipps, Jr. 17:20
Yeah, so right now, yeah, tourists can come in, get stay here for a month, get renewed up to three months. So that's something that we're exploring is, so how do we maybe expand that maybe have a program for our digital residents, maybe another layer on I was looking online in Croatia, for example, where if you could prove that you had 3000 euros in income a month, you could come and stay for a year or something like that. We also have challenges with people that just show up and they're looking for work. And then we're right now. And then now we have we have problems of how to get them repatriated and all that. So you know, we've got to balance that right. We want true desert nomads that already have an income coming in joy and, and we Let's grow together. That's the idea. So you know, one of the things that we're working on now is becoming a member of Interpol. So by the end of the year, we hope to be a member of Interpol, because, you know, one of the things we value is that we it has to be secure. And that's one of the thing on the RNs platform, unlike any other citizenship, we can be selective and say, only if you have a clean record, you can be a digital residents of Palau. I mean, that's, that's the process. And I think that's, that's really the goal is to provide a safe environment. Good regulatory environment that really supports entrepreneurship.
Balaji Srinivasan 18:39
So well, that's awesome. And actually, that's a good you know, kind of segue into maybe William, you can introduce yourself and kind of talk about RNS.ID and, you know, the digital ID program and how all that works.
William Wang 18:52
Yeah, absolutely. My name is William. I'm growing up in China, moved to us about 13 years ago, originally, like, planned to finish my PhD, but I just finished masters and start working. So I got the, you know, the opportunity to meet with President Webb's in the Bay Area. And we have, you know, like a conference set up, like a discussion of how to, you know, actually like to help Palau to, to improve the diversity of its economy.
Balaji Srinivasan 19:30
And when was that 2021 2022 or 21?
William Wang 19:33
That was the end of 2021. Yeah. And yeah, you know, I think the I think the goal was to basically like improve the economy without having to follow the Singapore model, which is to bring millions of people, right. So Palau wants to, you know, stay like, comparatively early on, like, you know, quiet. And then like, you know, I think one of the few ways to do this is basically to improve the population like, you know, without having to bring like, you know, condensed people to the island, you know, we basically reference to the Estonia model, like, you know, they have done that in past like in 2018. So definitely, we're not the first country to, to, to offer this program, on top of that, we can actually do a little bit of innovation, which is to bring this identity program on chain, one thing is make it a lot more secure, because we do like the KYC, AML check, before they can actually get the digital residency. So President was saying that, you know, this is actually like, the cleanest, you know, residency program in the world, right, because if you're a US citizen, you know, you have a criminal record, there's no way that, you know, the US government can say, oh, you know, you cannot be a US citizen anymore. But like, as the Pilates residency office, they have option to to stay now, right? If you have, if you have a criminal record, if you did, like money, laundry, or on a sanction list, or if you're, you know, politically exposed person, then you know, we have option to say no. And then on top of that, you know, this identity is not just like an ID card, right, um, I brought my, my plastic version over here. So basically, we offer, you know, into two formats, one format is as this plastic ID, and another format as as an ID, as a D ID on chain. So, basically, this, you know, identity is offered multiple chains, right? It's not just a theorem, you know, on the on the layer twos was also CK sync on BNB chain. So that, you know, like, we can pre qualify a wallet address, right, as a white labeled KYC wallet, which you can, like, do KYC, instantly, right with finance, you know, with exchanges, or also decentralized applications, right, like Union suave learning platforms like Aviv, you know, stuff like that. So that's kind of like giving the users a lot more flexibility of using the the digital version, as well, you can just use your wallet as a fully KYC solution.
Balaji Srinivasan 22:28
That's really awesome. I mean, one thing, so you know, basically, you have both the government ID and you have the on chain ID or the physical ID and the digital ID, the way I kind of think about this is, you know, Coinbase, in other place, I've talked about how the fiat currency cryptocurrency interface was very profitable, and actually much bigger than anybody thought. And we're having interfaces between now and your case, Fiat identity and crypto identity. And then we could also have, for example, Wyoming's dowel law is Fiat companies and crypto companies. So building those kinds of bridges, not just a Fiat, you know, to crypto currency exchange, but a Fiat to crypto identity exchange, and Fiat to crypto company, you know, transition and so on so forth in a president that you just talked about improving the corporate environment and whatnot, Wyoming and Tennessee and other states in the US have passed these Dow laws, if you're familiar with those, that could be interesting thing to look into, where you essentially, just like what RNS.ID is doing in terms of a non chain identity, you have an on chain company? Have you ever guys looked at that, or it may be something of interest?
Surangel Whipps, Jr. 23:32
We were talking about and it's something that we need to look into? Definitely,
William Wang 23:35
yeah, corporate registry. And then as you know, we're we're seeking ways to put the company on chain too.
Surangel Whipps, Jr. 23:45
So right now, we already have a corporate registry system, but it's, it's a next step is to put it on chain. Right. And so we're still trying to design the regulatory law to make sure that we do it right.
Balaji Srinivasan 23:58
And now, just like with the, you know, you mentioned, it's funny, you mentioned, Estonia and Singapore, those are also very tech savvy startup countries, you know, in their own way. And you know, Estonia has x Road, which you're probably familiar with their like overall identity program, they got independence also, around the time you did in 1991, from the Soviets, and they were also got into software and, and in this case, when you mentioned that getting the regulations and so on, right. Wyoming, Tennessee, and others have at least a template that you can now you know, clone and edit and whatnot. And, you know, I liked the strategy that you are using, it's similar to Sonia strategy. We're Estonia also is a small country. It's funny, there are a million people and you guys, like it's such a small population that you have to use a lot of stone these tactics, they have a million people, you have like 20,000, but some of the same tactics apply where they have essentially made software their national export. And that's kind of what you're doing here. Right in the sense of your the combination of software and sovereignty is becoming a national expert.
Surangel Whipps, Jr. 24:54
Yeah, that's the advantage of being small. You know, I can reach out to the President of the Senate and the Speaker and all Congressman and, and meet with them and and try to resolve these issues that we may have conflicts and and get things done quicker.
Balaji Srinivasan 25:07
And how is the carbon set up? Is it similar to kind of the US where there's precedent and a Senate in the house and whatnot? How should we think about that?
Surangel Whipps, Jr. 25:15
Absolutely. And even our capitol building looks like the Capitol Building in Washington, DC. So it was an interesting story, the one of the high chiefs of the village where the Capitol is, I said, Why didn't we? Why didn't you select the building that was more traditional in the way it looks? And he said, but that wouldn't be the symbol of democracy. So that those are our traditional men's meeting houses. And that's what they're for traditional men's meeting houses. So let's keep them that way. And, and this new form of government should not conflict with that they should work together.
Balaji Srinivasan 25:49
Interesting. So a combination between the tradition and that's really cool. And like how many people are in the Senate? And so what how does that all work? Like, we have
Surangel Whipps, Jr. 25:58
13 senators, and the senators represent the population. And then the delegates actually represent each state. So we have 16 states in PA, which are really the traditional villages that existed for 1000s of years. So they had chiefs and they had clans that all territories that were already divided up that were they fought over for 1000s of years. Just naturally, that's,
Balaji Srinivasan 26:28
that's really interesting. So it's it's basically it's like 13, senators, 16 delegates, and then a president is correct. So like 3030 people, what's great is you could probably get everybody into a room and get consensus on something. And, you know, it's relatively small country and folks are aligned. That's, that's really good.
Surangel Whipps, Jr. 26:45
But we we do a fairly good job and really maintaining those three branches of government. So you know, you have the legislative branch, we have the executive branch, which the President is, and we're on, we're elected separately, not part of Parliament, like in a lot of jurisdictions, and then the judiciary. So there are times that it's pretty vocal and very, we make use of the media quite well, too. So we've we've adopted, you know, as much of the good practices of transparency and open government as we can. Because, you know, I think that's important for democracy, successful democracies have to be open,
Balaji Srinivasan 27:23
I'm really impressed with, you know, how far you've come. It's a very small country. I mean, one thought is, just like as within a company, you can decide to build something yourself or buy it, and a startup will take things off the shelf, because they can't, they can't go and build a data center, for example, right? You know, as a small country, you have to make the decision as to, are we doing something within the country? Or are we going to do a treaty with another country, for example, like the US military provides defense to Palau? Right. And, but But you are managing diplomatic relations with 100 countries, essentially, which, so that's something that you've done internally versus militaries externally. Right? So how do you think about that division between like internal versus external? Like, what kinds of things do you run yourself? Versus what kinds of things do you, you know, sort of do with partnerships or treaties?
Surangel Whipps, Jr. 28:13
Well, I guess that would be the example of partnering with William to run our and if we did not, you know, we don't have the technology. And it's about finding the right partners to do it. 20,000 people, you cannot, you don't have the capability of protecting yourself. And so that's why a partnership or the relationship that we have with the United States is so important. So, of course, we help with the defense of the United States, but at the same time, they protect us. So it's, it goes hand in hand, you you work together. So you've got to find those special relationships where, you know, ultimately, the success of a relationship because you both have to win. It can't be lopsided, and it's only a one side benefit. So, and as long as you you have that goal together, you're working together and saying, Well, these are the challenges we have. But what can we both do to make it better? And yeah, just kind of keep doing that. And when it comes to education, or it comes to health care. It's about partnering with not only the Pacific, but the world. When it came to combat and COVID. It took everybody working together. I mean, we we use the who we ask for help from CDC, our closest allies, Taiwan, Japan, Australia. You know, the United States, they're all They're helping, and then it's taking that information and what the data that they've given us and say, okay, is this made sense for us? So we adopted the model that it's most important for us to get vaccinated as soon as possible. So we had the highest vaccination rates in the world really for we still I think had the highest vaccination rates. And we've been very fortunate You know, when COVID first came out, it was 2% mortality rate, we have one in 1000. So that that's, that's because you know, you take that information, your your experts here, look at it, work with partners and try to find the best solution for whatever situation that you're in. Also, in coming up with new business ventures, as a small tourism market, know that we have to depend on, on large companies to come in and help us with our tourism. We know that you need you need the marketing, you need their their their expertise, their their resources, to really help market Palau to the world. If you want to grow it.
Balaji Srinivasan 30:48
Maybe the Airbnb CEO can talk about Palau or something that's actually another kind of partnership. Right, right, basically. Right.
Surangel Whipps, Jr. 30:56
Exactly. And we already have Airbnb ease here. And it's been successful. They've done well.
William Wang 31:01
Yeah. And the pillow it can get verified on Airbnb, too. So just not not not just from crypto.
Balaji Srinivasan 31:07
Interesting. That's really interesting. Yeah, because once it's digital, you can use it on even web two things. Suppose with three, right?
William Wang 31:15
Yeah, yeah, banks, you know, hotel check in flight check in domestic flights, not cross border. And, you know, register a scooter, you know, go into a bar. Yeah. So for but, you know, for anything that requires age for verification, ID verification, those are all working. And then is right now we're even adding more benefits, like, you know, you can stay in hotels, or, you know, Puerto airlines, you get discounts, or a car rental for Palau is a lot more discount, so you can enjoy the local race, like hotel is almost like 40% off.
Balaji Srinivasan 31:55
Oh, that's good. So basically, if you get if you get an ID, then there's some discounts in visiting. That's really cool. I mean, it's funny, you know, I missed that. I should have seen this in January territory, too, because I see, Tim Draper was a founding digital resident, Tim Draper, Steve Jurvetson. and I were actually the first three Estonian II residents, when they opened their thing in 2013. So but I want to see what the country is like, it's gonna be really cool. So Tim became I think, the first digital resident like January 22. I think actually, you know, you mentioned these partnerships, which is, it's really interesting, because in a sense, you you're, of course, you're partnering with states, you know, on defense, and so on. But you're also partnering with networks, right? Like I think Vitalik has an RNS.ID. You know, I think CZ of Binance also did something with you guys, if I'm not mistaken.
William Wang 32:41
Yeah. CZ in June, and then announced the RSI, the insurance on the BNB chain, which is as a formal form of KYC. So you don't need to carry your like, Id everywhere anymore, right? You can just log in with your web three wallet. And then to do the full KYC was when I actually JP Morgan, you know, also mentioned as during a call with zk-sync, you know, so like, we're also expanding to the banking sector that, you know, they can use, as you know, like a form of ID verification.
Balaji Srinivasan 33:16
That's really I mean, just Palau have a bank,
Surangel Whipps, Jr. 33:19
we have local banks, that are US banks. So that's a Bank of Hawaii bank of Guam. But we have our own government bank, it's called the National Development Bank. And one of the projects that actually we're working on with, we found another partner, which is ripple, is a pile of digital stable coin project. And we hope to have that launched. We're hoping within the next few months, started locally, see how the local appetite is doing, learn, and hopefully expand and be somebody that you know, the world can use. I'll just follow.
Balaji Srinivasan 33:57
That's really interesting. And you know, the stable coin, would it be? Would it be like a US dollar stable coin? Would it be and running on ripple? Is that right? Or should I think
Surangel Whipps, Jr. 34:05
about US dollar? Yeah. US dollar, back stable coin. And on the ledger?
Balaji Srinivasan 34:11
That's really interesting. I mean, you are at the frontier of quite a few different things here. As a Sovereign, you've done state visits to the UAE, you've done state visits to Riyadh, right, in Saudi Arabia. Tell us about that.
Surangel Whipps, Jr. 34:26
Well, you know, one of the things we are very emphatic about is protecting our environment, because as a small island, we have islands that will disappear. So we have to do our part. And when I when we went to Abu Dhabi for was the Irina Conference, which is the International Renewable Energy Conference, and then also the Abu Dhabi sustainability week. So we're looking at how to find, you know, the UAE and Saudi Arabia are really leaders in especially in the soul With technology and a renewable energy space, and how to bring, leverage that relationship, and bring investment, because right now, all our energy is, is based on fossil fuels. And these all runs our power plants. So when the price of fuel went up, of course, it just causes inflation to go up so much because, and really pushes people back into poverty. So it's really a win win for us to transition to renewables, and but at the same time, so it's going to lower the cost of power, but at the same time, help the environment so, you know, going out there and learning about that, but also learning about all the, you know, incredible things they're doing over there in terms of investment and, and trying to diversify their economy. And you know, just how they're so open and bringing investment in and, and really spurring entrepreneurship. So we went had opportunity to go to Dubai finance center, talk to them, see what they're doing. Talk to different initiatives that they're doing. They're about setting up corporations and, and just their FinTech industry, and maybe some of the concepts we can adapt and use in Palau to help develop that on this side of the world. There's Singapore, there's Hong Kong. You know, we think Palau has an opportunity to be defended in a small niche to attract the financial industry here, too. So
Balaji Srinivasan 36:29
well, you know, the thing is that actually, I think people people know that startups, which are small companies can punch way above their weight. You know, like, the 13 people at Instagram, were able to basically tackle Kodak, which had 13,000 people and Google that IPO had only about 1000 people in 2004. And it changed the world. But I think people don't realize how, you know, for example, the Cayman Islands is only about four times your size, or they're like 60 something 65,000 people, maybe you become the cayman islands of the South Pacific. I mean, that's a reasonable ambition, actually, they became a financial center. And, you know, so in your in the Asian timezone could be, it could be interesting thing, if you're getting into crypto in a big way. You know, also like, you know, ancient Rome, like the capital only had like a million people to us, you know, at the time of independence was like 2 million people or something like that. I think. I think people really underestimate how much a small and motivated state with competent people can do.
Surangel Whipps, Jr. 37:20
No, that's exactly the model that we're looking at. We're looking at, like, their Switzerland, and then there's lynchin Stein. So we say we're lynchin Stein, you know, and then and then in the Caribbean, there's Cayman, there's Bermuda, there's, you know, so that's a very good, you know, analogy that that's, that's really one of the things that when I was in grad school, I did a study, and it was on foreign investment, minimum wage and foreign labor. And we were the countries that we used as examples where the Caribbean and Cayman was one of them because of their tourism, their financial sector, and then how they manage the
Balaji Srinivasan 38:02
labor. It feels it feels like the Caribbean, the Caribbean Islands and the South Pacific countries are kind of similar in the sense of being relatively several independent countries near each other relatively small island nations, probably something to learn from each other or something like that. Is that correct? Would you would you agree that
Surangel Whipps, Jr. 38:20
yeah, the only challenge that we have is that it's the Pacific is huge. Right? So just with our Micronesian region to get from one side to the other which is Katie bus which is on the other side and we're only one part of the Pacific is like an eight hour flight the three freely associated states which is Palau FSM and the Marshall Islands. It's the size of the continental US. We the challenge is for like cruise ships. So the cruise ship industry has not really looked at this area because islands are you can't visit one island every day, you know, like in the Caribbean, you just hop across. So that is our challenge. But our advantage, Palau is advantage compared to the rest of the Pacific is we're so close to the rest of Asia.
Balaji Srinivasan 39:06
So yeah, it's funny even though you're remote in some ways in terms of physical space, your timezone is actually pretty good for doing business in Asia. So so that might be something where the digital nomads even if it's a plane flight out there, it's pretty good timezone your English speaking. You know, I've actually thought Guam which is somewhat nearby to you would also be interesting because US citizens can just go and set up and they don't even need a visa, they can just go and like you know, live in Guam and then you could work in an Asian timezone remote if and then you know, maybe go on site once or twice a year or something like that. That might be a model that you could look at. If you had, you know, you basically set it up for remote. It seems like you've got decent internet over there. Right? So if you've got internet then you know, maybe you can, you can support that
Surangel Whipps, Jr. 39:51
we have one fiber optic cable already. We have a second one that will come online at the end of this year. And They're looking at Palau is also another place that might be a hub for cables. And then we have a project the next two years to put fibre to the home everywhere on this island. So, but we have, we have pretty good cell service everywhere. And yeah, the internet speeds, we'd like to have 200, mips at every home, but we're not there yet.
Balaji Srinivasan 40:22
So pretty good, pretty good. I mean, like, it's, that's the thing is, it might be a little tricky to get out there. But then once you're there, you're connected to the world still, especially if that second cable comes in. I mean, you mentioned cruise ships on, is it just like, do they not come at all, or they just find it hard to come?
Surangel Whipps, Jr. 40:39
Well, I think the cruise ship model is, you know, you want to be able to pull into a port next day or you wake up, you're in another port, and kind of hop around the islands.
Balaji Srinivasan 40:48
There's a fascination within crypto and digital nomads of, you know, crowdfunding cruise ships and living on them full time. And, you know, maybe they can dock and plow for,
Surangel Whipps, Jr. 40:56
yeah, bring them in and just have parking here. They don't have to leave. Right? Exactly.
Balaji Srinivasan 41:00
That's right. So maybe you spend three months of the year in paradise four months, something like that. And then you, right, that might be the model is like, you know, the the so called perpetual traveler, where you're not resident in any one place too long, and you've got a great intranet. And so the tricky part will be cruise ships require maintenance. So you need to work out all the parts and all that type of stuff. And that that's something which, you know, the cruise ship, you know, like industry got to figure out, but modular that could be pretty interesting. You park them stay there for a while they provide jobs and so on for you guys. And then maybe you say, Okay, if someone's living on a cruise ship, they could have a, they could have a longer visa, something like that, figure out the residency aspect.
Surangel Whipps, Jr. 41:35
Or they could have, they're gonna have boats, you know, just buy yourself a 30 metre yacht, come and park it here. And stay here for a while. It's funny
Balaji Srinivasan 41:45
people think, you know, normally that land is so called inelastic, if you've heard that term, meaning you can't build more of it, right? Maybe you can, if you've got big enough boats that are coming in you it's actually like every parking space. And so you know, 5000 people if it's a cruise ship or something. So we've covered actually quite a bit we've covered, you know, kind of an overview of Palau, the journey sovereignty, your election, talked to William about RNS.ID and how you guys met. You talked about Palau and crypto. You know, I have a couple of more questions, which are, maybe we can, you know, wrap up, but basically, what other technologies are you interested in? So, you know, for example, would you want to have an island that was a self driving car zone or something like that? Like, would you be interested in entrepreneurs coming to the country to try to do things like that, but what is your take on it?
Surangel Whipps, Jr. 42:33
Well, you know, we were approached last year, we we hope that they're still they're still exploring it, but drones, delivering packages to homes. We're also working on electric cars, and seeing how we can start that here, here in Palau, and also hydrogen making use of hydrogen that's on the renewable space. So yes, we're definitely like new technology and like ways we can work together with partners that want to develop new technology, because we have a an extensive reef system, you know, technologies in aquaculture to produce more and more fish and seafood products. So that would be something I think that we definitely like to explore.
Balaji Srinivasan 43:22
That's really interesting. So basically, essentially, growing, either, I guess, edible algae, or just more generally, aquaculture is like fish and shrimp and other kinds of things. Crabs,
Surangel Whipps, Jr. 43:32
because then we're gonna get more tourists. We need more seafood. So yeah. And yeah, and you don't want to you don't want to take too much from the reef? Because then it's not sustainable.
Balaji Srinivasan 43:41
That's right. So it's, everything's got to be sustainability. renewability when you're a small island,
Surangel Whipps, Jr. 43:45
well, one of the things Paulo, of course, is known for is its marine environment. And I've always believed that, you know, we have the opportunity of being a really a research hub for the marine sciences. And maybe we can have offer university courses here, or extension programs. I know, like Stanford, they have they come and do some work here, but more of a base that actually really spurs innovation, because, you know, cancer research and there's all kinds of things that you can and learn from the environment. But also, we found that we have coral species here that are very resilient to a heat and resilient to coral bleaching and, and how we can share that with the world. And, you know, so we have a coral reef Research Center, trying to improve our, our small community college, the upgraded science department, but I think there's, there's opportunity really, you know, our dream is to have a university here that's, you know, world renown. It's really in the marine science and that kind of space and, and can contribute to contribute to the world.
Balaji Srinivasan 44:49
That's really interesting. I mean, I think, you know, you have a few of these unique advantages with the marine aspect with the crypto aspect and you start to build a parallel Academy, you know, you've got subjects that are for you actually have a local advantage. And that's really, that's really interesting. The one question I had was basically, the path to diplomatic recognition. Right. You know, it was it was a, it was a long path for Palau, but done infinitely long when you started as a trustee and so on. A while back, the president of Kazakhstan made the remark that if every nation that wanted independence, got it, we'd have something like 600 sovereign countries in the UN, not 180. You know, and, you know, I think that there probably will be I mean, this is one of our theses is, there will be many more new countries, many more nations getting it, what do you think about the path to sovereignty to getting independence? How should How should people think about that?
Surangel Whipps, Jr. 45:44
Well, I think I think, well, first of all, you have to have people that have share the same values, same interest, working together, you know, that's, that's what's important. So if and kind of the same culture, sometimes it's, it's difficult. So Micronesia, as I said, it was the size of the 33. What we call freely associated states now is the size of the continental US at one point, as you guys go independent, but all of you stick together. Because, you know, of course, we'd be a much bigger country. But our leaders at the time said, but we're very different culturally from them. It's going to be difficult for us to come to agreements and get through things. So we said, well, we're going to secede and not be part of that grouping. So that's why we're not part of the Federated States of Micronesia. So that became Palau on one side. And then in the middle, there's the Federated States of Micronesia, and the other ones that seceded was the Republican Marshall Islands. Because we all have different languages. And I think that was what kind of set us apart. So we have different languages. It was hard for him, but the US said, No, you should just all be lumped together one, one country. But you know, we're glad that they recognize that we are sovereignty, and we are able to, you know, be on our own. I think in hindsight, you know, we, I think we're happier that we did that. Because it ultimately we have our own language, we are able to preserve our culture. And we can move forward and, and not have to try to mix everyone together, which is sometimes difficult with that solid base and that solid language and culture, then you bring people in, but at least we are defined as an entity.
Balaji Srinivasan 47:42
I love that, you know, honestly, you're speaking my language, because that concept of having a strong community and culture, and then you can get alignment within it. And then you can have friendly relations with Narau and the Marshall Islands and the Federated States of Micronesia, because each group can kind of manage their own things. And then they can kind of interact as friendly neighbors, but recognizing that, you know, there's certain things that they want to manage things differently internally, right, I think that model has worked quite well for you and help to lead to your current innovative status.
Surangel Whipps, Jr. 48:14
Right? I mean, it's going to be much more difficult to get everybody to agree. Now, let's try this digital residency program. It's harder if we had to get everybody together to agree on that.
Balaji Srinivasan 48:25
Yeah, actually, I know, the Marshall Islands is also starting to do some interesting things in crypto and right. And so what happens is, you know, maybe they made all everybody might not agree with you at first, but if you're small enough, and agile enough, you go first, and then you pioneer it, and then people can say, Oh, actually, you know, that was a good idea that, well, we'll copy them, we'll clone them. And that's kind of worked within the US with small states like Wyoming going and pioneering and now it can work outside the US with, you know, foreign states, you know, like independent sovereign states, like yourself going in pioneering? Yeah. Awesome. Okay, so Well, that's, I think we got a lot of awesome stuff. Let me know if there's anything you know, you know, President whips or, or William, that you'd like to talk about, I think this is going to be a really great episode.
Surangel Whipps, Jr. 49:12
No, it's just been a pleasure talking with you and sharing about Palau and, and sharing with the world. The opportunities that are here, and, you know, we really encourage everyone to come and visit, especially the digital residence and see how we can grow together. So, I hope that the digital residency is not just something that they they keep and say, Oh, we never have to visit Pillai. I'm hoping that every digital resident visits Palau. And as part of bringing new ideas and helping Palau grow to be maybe a place that they want to live. Eventually.
Balaji Srinivasan 49:44
I will, I will actually, I hope RNS.ID can handle a million clicks, because you might get a million clicks soon. And we'll see. William, do you have any thoughts?
William Wang 49:55
Yeah, so Palau is actually like a very welcoming country. Right. So, you know, like when you get here, it's actually very rare to, you know, to get resided in American power in Asia. So, you know, you go to Singapore or Tokyo, they're like Asian style, but here, it's just like another small town in the US. So like for, you know, like, outsiders pretty easy to get, you know, situated, you know, there's no discrimination there's, you know, like people are very friendly. Yeah. So you know, again, you know, we welcome all the US residents and yourself and your followers to
Balaji Srinivasan 50:40
well, we'll break we have a lot. So we'll have, maybe we will break 10,000 Just to start or something like that. But I'm looking forward to visiting. I I've really enjoyed talking to both of you and hearing about what I was doing in terms of innovation and crypto innovation specifically. And hopefully, this podcast helps put Palau on the map in tech, and everybody knows what you guys are doing. So thank you very much for coming on.
Surangel Whipps, Jr. 51:06
Thank you. Thank you for the opportunity, and we look forward to seeing you in Palau.