The Office of Public Auditor for the Republic of Palau has audited the pilot project for the stablecoin on the XRP Ledger, highlighting some legal compliance issues.
Shortcomings in the Launch of Palau's Stablecoin
The audit conducted by the Office of Public Auditor noted that the Ministry of Finance failed to obtain all necessary approvals for the launch of the Palau Stablecoin (PSC). The report stated that the agreements were not certified by the National Director of Program and the Attorney General.
Defense by the Ministry of Finance
The Ministry of Finance defended its actions by stating they acted according to legal advice from the Office of the President. The Ministry pointed out that the agreement with Ripple was a Memorandum of Understanding, which did not bind the country to formal certification.
Prospects for Palau's Stablecoin
The future of the PSC remains unclear, as any subsequent steps to expand it will require legislative approval. The report stated, "Any further steps towards establishing a circulating currency would require legislative approval. Without the enactment of a law by the Olbiil Era Kelulau, such an expansion would be unlawful."
The audit of Palau's Pilot Stablecoin project raises significant questions about the country's legal compliance. While the Ministry of Finance was cleared of corruption, its actions may set a precedent for future projects.
