In 2022, the Republic of Palau announced the launch of a “digital residency program” in collaboration with Cryptic Labs. The blockchain-based residency and ID system, known as the Root Name System (RNS), gives applicants access to future services in Palau’s burgeoning digital economy.
The island nation of Palau is aiming to diversify its economy by introducing a digital residency program on the blockchain.
The Root Name System initiative will serve as a fundamental digital ID recognized by a sovereign nation. Cryptic Labs, a blockchain research center and commercial accelerator, is developing RNS.
The benefits of RNS digital residence
This is the first time that global citizens can apply for blockchain digital residence backed by a sovereign entity, and people can apply through the RNS site.
Once approved, users receive a government-issued ID in the form of a physical card as well as a non-fungible token (NFT) on the blockchain. As an NFT, the RNS ID serves as the foundational digital id recognized for legal identity and chain verification.
The ID is valid for any identity need, such as KYC, because it is issued by the state. The RNS platform also provides users with future features such as address and shipping services, as well as digital signature verification.
The RNS system is built with user privacy and security in mind, employing end-to-end encryption to provide users control over their information and identity exposure.
Some of the benefits of Palau’s digital residency program include:
- KYC on major exchanges, e.g. Binance
- 0% income tax, 0% cap gains
- Open accounts
- Use for identity verification, such as hotel (Airbnb, etc.) registration, California DMV authentication, Costco/CVS pharmacy purchases, etc.
- Enjoy up to 20% discounts on hotels, airfare, and car rentals
- RNS airdrop points redeemable for RNS services
- Flat-fee, no appointments, done in minutes using the internet
- Pay with Apple Pay, Visa, Mastercard, or crypto
- +6 months residency in Palau
The application procedure for new digital residents is a seamless Web3 experience, allowing users from all over the world to apply and be authorized without having to fly abroad or visit an embassy.
Once users have passed an ID verification and AML check, the ID can be approved in as little as a few minutes.
Citizens from most jurisdictions around the world can now register for the platform, which is now open for registration. Users who are interested in applying for Palau Digital Residency can do so at www.RNS.id.
How long is the digital residency valid?
Digital residents of Palau’s emerging digital economy can choose between a 1 year, 5 year or 10 year residency application, each with a different price tag.
Estonian e-Residency vs. Palau digital residency
On the surface, both the Estonian e-Residency, the Portugal e-residency and the Palau Digital Residency provide a digital identity. There are, however, a few significant differences, even though both offer digital residency worldwide.
You can apply for e-Residency of Estonia online and pay the state charge of €100-€130. You must then pass a background check conducted by the country’s Police and Border Guard Board. After receiving confirmation that your application was successful, you can pick up your digital ID card at one of Estonia’s embassies or other designated pickup places. This face-to-face meeting is critical. It ensures that your digital ID is held to the highest standards set by the EU’s EIDAS framework.
To become a digital resident of Palau, fill out an online application and pay the government fee with a credit card or bitcoin. They also provide a discount to Voyager Pass NFT holders.
However, with the Palau Digital Residency, ID cards are mailed directly to the applicant. This is more convenient than having to go somewhere physically for a face-to-face meeting.
Another significant distinction is that Palau issues two sorts of identification cards. The first is a tangible ID card with a photo that may be used to verify your identity using standard techniques. The other is a blockchain-based digital ID, which currently has limited utility.
