Will a state launch its own stablecoin by the end of the year? It could happen if legislation proposed in Wyoming this week ultimately passes.
The proposed bill is sponsored by state senators Chris Rothfuss and Tara Nethercott, along with state representatives Mike Yin and Jared Olsen. The act would allow Wyoming treasurer Curtis Meier Jr. to create a state stablecoin pegged to the U.S. dollar.
The token would be redeemable for a single dollar held in trust by the state.
If passed, the state treasurer would have until December 31 to launch the stablecoin, or otherwise provide a report by November 1 to the select committee on capital financing and investments detailing why it is not currently feasible.
Stablecoins are crypto tokens that are typically pegged to fiat currency—often the U.S. dollar. Unlike traditional cryptocurrencies like Bitcoin and Ethereum, which can be extremely volatile and swing wildly in price, stablecoins maintain the same approximate value regardless of market activity.
Current examples of popular stablecoins include centralized tokens like Tether (USDT) and USDC, as well as decentralized options like DAI and Terra’s UST. Stablecoins can be used as a store of value or to weather market volatility, as well as a means to transfer funds between crypto assets.
They can also be used within DeFi protocols, which allow for lending, borrowing, and trading assets without third-party intermediaries.
Why would Wyoming need its own state-sponsored stablecoin? That isn’t made clear by the proposed legislation. However, given the state’s increasing focus on crypto and related trends—as the first state to grant a charter to a crypto bank, as well as to legally recognize DAOs—it could play into Wyoming’s future crypto ambitions.
Caitlin Long, founder and CEO of Wyoming’s Avanti Bank & Trust, tweeted that she isn’t entirely sure of the stablecoin’s purpose—she described it as a “mind-bender” on Thursday.
“[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.
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