Wyoming legislators have proposed legislation that would allow the state to create its own stablecoin, which would be tethered to the US dollar.
Will the State Accept the Legislation?
It’s possible if legislation introduced in Wyoming this week passes. The Wyoming Stable Currency Act (SF0106) was introduced by lawmakers on Thursday, paving the path for the crypto-friendly state to develop its own dollar-pegged token.
State senators Chris Rothfuss and Tara Nethercott, as well as state representatives Mike Yin and Jared Olsen, are among the bill’s sponsors. Wyoming Treasurer Curtis Meier Jr. would be permitted to issue a state stablecoin that is tied to the US dollar under the act. The token would be redeemable for a single dollar that the government would keep in trust.
If the bill is enacted, the state treasurer will have until December 31 to launch the stablecoin, or until November 1 to provide a report to the select committee on capital financing and investments explaining why it is not now viable.
Stablecoins are cryptocurrency tokens that are tied to a fiat currency, most often the US dollar. Stablecoins, unlike typical cryptocurrencies such as Bitcoin and Ethereum, which may be very volatile and swing wildly in price, retain a consistent value independent of market activity.
Popular stablecoins now include centralized tokens like Tether (USDT) and USDC, as well as decentralized choices such as DAI and Terra’s UST. Stablecoins may be used as a store of value, a hedge against market volatility, and a way to move money between crypto assets. They can also be used in DeFi protocols, which enable lending, borrowing, and asset trading without the involvement of third-party intermediaries.
What Would it Take for Wyoming to Have its own Stablecoin?
The proposed legislation does not make this obvious. It might, however, play into Wyoming’s future crypto goals, given the state’s growing focus on crypto and related trends—as the first state to award a charter to a crypto bank and to officially recognize DAOs.
Caitlin Long, the founder and CEO of Wyoming’s Avanti Bank & Trust, tweeted on Thursday that she isn’t sure what the stablecoin’s function is, calling it a “mind-bender.”
It’s a mind-bender–akin to a muni bond that neither pays interest nor has a maturity date but is redeemable–except it isn’t exactly that bc, as a token, there would be big legal & structural/settlement differences. Lots of questions. Definitely a conversation-starter, @rothfuss— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) February 17, 2022
“[It’s] akin to a [municipal] bond that neither pays interest nor has a maturity date but is redeemable—except it isn’t exactly that [because], as a token, there would be big legal and structural/settlement differences,” she explained.
“Lots of questions. Definitely a conversation-starter,” she tweeted at Senator Rothfuss, who serves as the Chairman of Wyoming’s Select Committee on Blockchain, Financial Technology, and Digital Innovation Technology.