The initiator of the demand letter, Sen. Mark Rudimch, addressed the claims to state auditor Satrunino Tewid, expressing concerns about the security of the digital currency’s pilot project. The opposition senator and his supporters believe the PSC testing, which began in July with the help of U.S.-based Ripple, violates the island nation’s constitution.
Rudimcha said the Department of Finance has no authority to launch such a program in Palau, and government resources are being used without following proper procedures. A politician is certain: that using the Ripple grant for research and development related to the pilot program supersedes or suspends existing laws.
“Could this be an unconstitutional precedent? If the launch of alternative payment systems is allowed under a private partnership with the government, can the practice be used in other pilot programs for corporate profit?” the letter’s authors wondered.
Palau’s Stablecoin project manager Jay Hunter Anson announced that PSC testing is now happening on a small scale. Palau’s Ministry of Finance has issued a limited number of stablecoins using the Ripple network. The concept is now being tested and participation is limited to only 200 government employees. Each participant will receive $100 worth of Stablecoins and can spend them at retail stores. The program will last for about two months and based on the results, the government will decide whether to continue it.
Earlier, Palau President Surangel S. Whipps Jr. (Surangel S. Whipps Jr.) supported the program, saying he hopes it will help Palau improve the quality of financial transactions and empower citizens.
Last year, the Republic of Palau announced a partnership with Cryptic Labs to launch the Root Name System (RNS), a blockchain-based “digital residency” system. However, the opposition has criticized this initiative as well.