Palau Wraps XRP Ledger Stablecoin Audit: Here’s What Ripple Paid

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure Palau’s Office of the Public Auditor (OPA) has released the long-awaited performance audit of the government’s XRP-Ledger-based stablecoin pilot, confirming that Ripple Services Inc. funded the 25-month experiment with a single $25,000 payment and that just over half of that grant has been spent. The 12-page report closes the accounting on the Palau Stablecoin (PSC) project, which ran from 26 October 2021 to 27 November 2023.

Ripple’s $25K Grant Confirmed In Palau Stablecoin Audit

The audit documents show Ripple wired $25,000 into the National Treasury on 10 March 2023. Of that amount the Ministry of Finance (MOF) disbursed $14,035, mainly to reimburse three participating merchants—Surangel & Sons, Penthouse Hotel and King’s Minute Mart—for redeeming PSC tokens spent by 154 volunteer government employees, each of whom received an allocation of 100 PSC (one-to-one with the US dollar). The unspent balance of $10,965 remains in the Treasury pending a political decision on a potential second phase.

Related Reading: Expert Shuts Down XRP Lawsuit Delay Rumors: ‘2026 Not Happening’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).

Related Reading: XRP Failed Because Ripple Created RLUSD, Claims BitGo CEO“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.

XRP Ledger Pilot Ended: What’s Next?

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.”

For Ripple, the audit caps a three-year engagement whose cash outlay—$25,000—was modest compared with typical central-bank-digital-currency pilots. While the report makes no judgement on technical performance, it confirms that the XRP Ledger handled mint-and-burn cycles and retailer redemptions. For Palau’s policymakers, the next decision is whether to draft the legislation that would turn PSC from a proof-of-concept into legal tender—or to leave the remaining grant dollars unspent and the project on the shelf.

At press time, XRP traded at $2.1696.

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