The US state of Wyoming is proving once again that it is rather crypto-friendly. Indeed, local legislators would like to launch their own stablecoin this year and a bill could be proposed very soon. This stablecoin would replicate the price of the US dollar, similar to Tether’s USDT or Circle’s USDC. However, the motivation for this potential future stablecoin remains elusive.
Wyoming wants to create its own stablecoin
Some US states are becoming increasingly fond of cryptocurrencies. Thus, we mentioned a few days ago the desire of the governor of Colorado to allow taxpayers of his state to pay their taxes in cryptocurrencies.
Today, it is Wyoming that wants to go even further. Indeed, the rural state, which is also Colorado’s neighbour, wants to create its own stablecoin. A bill, called the Wyoming stable token act, was introduced last week and is due to be discussed this week.
State Senators Chris Rothfuss and Tara Nethercott, along with State Representatives Mike Yin and Jared Olsen, made the proposal. If passed, the legislation would allow the state of Wyoming to create its own stablecoin pegged to the US dollar (USD).
The local treasury would then be required to hold the USD value of the stablecoin in circulation.
The real utility of Wyoming’s stablecoin in question
Beyond the “publicity” aspect for the state of Wyoming, the usefulness and purpose of stablecoin is in question. On Twitter, Caitlin Long, founder and president of Wyoming’s Avanti Bank & Trust, who is herself openly pro-Bitcoin (BTC), wonders.
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
Long says it would be more of a headache than anything else, as the bill does not specify what the stablecoin would be used for. Instead, she insists that Wyoming eventually wants to become one of the most crypto-friendly states in the US.
At the moment, it is more about riding the wave of digital assets than actually serving Wyoming residents. In addition, we will need to be certain that the bill can be enacted.
Lummis, whose home state of Wyoming is trying to be very pro-crypto, is asking about stablecoins and deposit insurance.
Liang says proposal to limit stablecoin issuance to banks does not “necessarily” mean that stablecoins need deposit insurance. Depends on circumstances.
– Rob Blackwell (@robblackwellAB) February 15, 2022
On the one hand, despite its bipartisan nature, the bill must pass the difficult vote. On the other hand, if the bill is enacted, it should be remembered that the US Constitution only allows Congress to legislate on currency.
However, as the letter of the bill is unclear, the stablecoin is not intended to replace the USD for the time being, but simply to replicate its value. It could therefore not be considered a currency in its own right or even a means of payment.
