Ripple’s contribution was properly booked under the FY 2023 budget law (RPPL 11-24) and, in OPA’s words, “was properly accounted for and deposited into the National Treasury,” a finding that dispels earlier speculation that the grant bypassed normal budget channels.
OPA opened the probe at the request of Senator Mark Rudimch, whose Resources, Commerce, Trade & Development Committee raised questions in July 2023 about the programme’s constitutionality and financial controls. The audit therefore set two narrow objectives: whether the MOF had legal authority to partner with a private company and whether it followed Palauan law in doing so.
On substance, the auditors concluded the MOF “acted within its broad authority and did not violate its mandate,” but they flagged two procedural breaches. First, neither the original October 2021 memorandum of understanding nor the December 2022 Ripple Master Hosted Stablecoin Services Agreement was certified “for form and legality” by the Attorney General, as required by 40 PNC § 612. Second, the National Director of Program, Budget & Management did not certify fund availability when the services agreement was signed, a step mandated by 40 PNC § 401(b).
“The Republic of Palau cannot ascertain the form and legality of the agreements as intended by law,” OPA wrote, urging the MOF in a formal recommendation “to ensure that every government contract…is certified by the Attorney General before execution.”
The Ministry accepted the admonition, but in its written reply stressed that “agreements that do not bind the Republic are often acceptable without AG review,” adding that it had “consistently relied upon legal advice provided by the Office of the President’s legal staff.” On the budget-certification lapse, officials noted that certification did occur at the time of each disbursement and argued the grant was already covered under annual outside-assistance provisions. “Thank you for the findings, which are accepted as presented,” the MOF told auditors.
Beyond the procedural fixes, OPA offered a nuanced verdict on the policy experiment itself. It praised the pilot’s design for exploring “technological solutions enabling the Ministry of Finance to manage the minting, distribution, redemption and destruction of PSC…recorded on the public XRP Ledger,” and it highlighted potential benefits for financial inclusion and lower transaction costs. Yet the report also cautioned that rolling out a circulating national stablecoin would require explicit legislation by the Olbiil Era Kelulau (Palau’s Congress); without such an act, any expansion “would be unlawful.”
At press time, XRP traded at $2.1696.
