Remember stablecoins? Thought they had fallen by the wayside over the past couple of years? Lost their appeal? Well, stablecoins are IN and are going to get a big boost from the state of Wyoming.
Wyoming has been the most forward thinking and progressive state in the nation in adapting to the blockchain and digital asset sector. Everything from blockchain educational initiatives, legal blockchain corporate structures and even enacting new banking legislation has happened in the Cowboy State. And now, the nations first government issued stablecoin will be in…….Wyoming.
First, there are basically three types of stablecoins; a fiat-collateralized stablecoin maintains a reserve of a fiat currency (or currencies) such as the U.S. dollar; a crypto-collateralized stablecoin is backed by other cryptocurrencies; and, an algorithmic stablecoin may or may not hold reserve assets. Their primary distinction is the strategy of keeping the stablecoin’s value stable by controlling its supply through an algorithm, essentially a computer program running a preset formula.
The state’s recently enacted Stable Token Act is the latest step in the Wyoming’s efforts to create a business and legal environment that is tailored to digital assets and blockchain businesses. The Act creates a path for Wyoming to issue the United States’ first government-issued stablecoin, which would be fully backed by reserves of US dollars. As noted above, it is a fiat-collateralized stablecoin.
Obviously there are regulatory, legal and practical uncertainties that exist around Wyoming’s ability to issue a stablecoin. With the law short on specifics, the committee created by the Act to develop the Wyoming stablecoin will have a list of open issues and challenges to overcome before the first token issuance. But absolutely NOTHING gets done until you start doing it. That’s Wyoming. It starts doing things.
So even with all the uncertainties, Governor Mark Gordon announced that he would allow the Stable Token Act to become law after the Act had addressed many of his concerns. Now Wyoming is poised to become the first state in the union to have a stablecoin, thus insuring its commitment to bring regulatory clarity—albeit on a state level—to one sector of the digital assets market that provides one of the more concrete use cases for digital assets in financial services.
Expect multiple challenges from Washington and probably every Fed agency you can think of, but it’s Wyoming. Things are different out here in the West.
You’ve heard of “Don’t mess with Texas?” Well, “Don’t f*** with Wyoming.”
