Palau’s Senate President Hokkons Baules said that there are concerns that the partnership between Ripple and the government in launching a Palau stable coin has not been authorised by law,
On Monday’s Senate Committee on Banking, Insurance and Other Financial Matters hearing with Ministry of Finance regarding the Digital residency, Baules questioned Minister Kaleb Udui, as to whose authority approved the stable coin pilot project.
“My concern Minister is that you and the President are connected to Ripple and using the government and its resources, using your position as minister of Finance, using government lawyers to conduct business which has not been authorised by law,’ Hokkon said.
Palau, in collaboration with Ripple, launched Palau stable coin “kluk,” using the Ripple Central Bank Digital Currency (CBDC) platform to “holistically manage and customise the entire life cycle of the stablecoin,” including for distribution and transactions.
Udui explained, for the pilot project, Palau received money from Ripple, to put into the wallet of the 200 government employee participating in the pilot project. “The funding that people are using in their wallet comes from Ripple, “Udui told the committee.
Hokkons questioned under whose authority made the decision to launch the pilot project which Uudi said was a government agreement with Ripple to see if the stable coin project will work in Palau.
‘Who made the agreement, “Baules asked which Udui said the agreement was made by President Surangel l Whipps and government lawyers and Ripple.
Hokkons expressed concerned that an agreement, which seems to be a private business dealing, had utilised government money and government employees to operate the pilot project and without OEK’s consent,
“You have to have the consent of OEK on what you are doing, how did you come up with that idea,” Baules told Udui.
Udui said it was his understanding that the OEK is aware of the project as it has met with them several times in the past to explain the pilot project. He added that Ripple is the one paying for the expenses of the project and no government money was used.
“Minister this looks like bribery, Ripple gives you money to do their business,” Baules said,
Baules said Congress has not given the executive branch any authority to conduct the pilot project,
The Palau stablecoin, according to fintech news, will benefit Palau by reducing transaction fees and currency costs while boosting financial inclusion.
In addition, it says it will allow government employees to make Palau stable coin (PSC) to enable retailers and convert PSC to US dollars. According to the report, the Ministry of Finance will be able to “mint, distribute and process inbound redemptions and destroy PSC and fully control the circulation.
President Whipps said that digitising Palau’s currency will help to build up the economy and improve financial transactions.
However, Chairman Mark Rudimch of the Committee on Resources, Commerce, Trade, and Development have requested the Office of Public Auditor to conduct an audit of the Palau Stablecoin Pilot Project.
SOURCE: ISLAND TIMES/PACNEWS
