Long gone are the days when venture capital was flowing into fintech startups with bold ideas — and little to show in terms of business metrics and fundamentals.
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As crypto investing becomes more mainstream and institutionalized with bitcoin ETFs, Wyoming is already pushing into the next phase of growth for crypto: consumer payments.
The state is creating its own U.S. dollar-backed stablecoin, called the Wyoming stable token, which it plans to launch in the first quarter of 2025 to give individuals and businesses a faster and cheaper way to transact while creating a new revenue stream for the state. The group behind it is hoping it can serve as the model for a digitized dollar at the federal level.
Success would be “adoption of a stablecoin … that’s transparent, that is fully backed by our short-term Treasurys [and] that’s dollar dependent,” Wyoming Governor Mark Gordon told CNBC at the Wyoming Blockchain Symposium in Jackson Hole. “One of the big things for me is to be able to bring back onshore a lot of our debt, because if it’s bought by treasuries and supported by Treasurys, it will help to stabilize that market to a degree.”
“It is clear to me is that digital assets are going to have a future,” Gordon said. “The United States has to address this issue. Washington’s being a little bit stodgy, which is why Wyoming, being a nimble and entrepreneurial state, can make a difference.”
The Cowboy State isn’t new to pushing the boundaries of business law. In 1977, it created the LLC and it has passed more than 30 pieces of crypto legislation to create a favorable regulatory environment for businesses and investors since 2018.
Development on the project is ramping at a time when many crypto market participants are wondering what’s next. Making bitcoin ETFs available to U.S. investors in January was a huge feat. It was the result of a more than 10-year effort by the industry, and sent prices to new records this year. But although the market is still bullish, trading has been rangebound for months.
Plus, crypto and its underlying blockchain technology were always intended to be used for more than just price speculation. Consumer payments, in many cases via stablecoins, are widely seen as the killer app for crypto and gateway to mainstream adoption of this technology.
The vision
Wyoming is currently vetting potential partners and vendors with more tech expertise to help build the stable token. It will require an exchange and wallet providers – Coinbase and Kraken, for example, offer both – to purchase and hold the token. The state plans to issue the token to an exchange so the exchange can issue it to the retail user. From there, it should be just another payment method for everyday things, said Flavia Naves, a commissioner at the Wyoming Stable Token Commission.
“When you walk into Cowboy Coffee in Jackson, Wyoming, and you want to buy your latte, there’s going to be their wallet there in Solana that you can use to buy your coffee with the Wyoming token,” she said, describing the vision for the stablecoin.
It also has a public good tilt to it: the commission plans to invest reserves that back each token in circulation into Treasurys and reverse repos, and use the interest made on those investments to fund its public schools.
At the conference, Gordon emphasized the importance of resisting the urge to focus too much on how much money the state can make here and to instead prioritize reserve management.
Keeping parity
Stablecoins are supposed to keep parity with an underlying asset, usually the U.S. dollar, but they can and have deviated from their pegs due to a spike or drop in demand – especially with a lack of liquidity – poor collateralization, regulatory crackdowns or network congestion.
Naves emphasized that there will be a “buffer” in the reserves to account for any potential deviations and full transparency to establish and maintain public trust.
“There will be audits available to the public on how many tokens [are] in circulation [and] how much money is in the bank account backing, so you can always see there is a 1-to-1 [stablecoin-to-dollar ratio],” she said. “This is a public token as well so as with any public service, all the information is available.”
The commission invites the public virtually to its meetings on the stable token and posts the minutes to its website afterward.
“This is fully reserved and part of what we’ve been working out … is to make sure that we can fully back whatever it is we’re going to do,” Gordon said. “Plus the fact that our legislation says that when a person buys a Treasury or a repo, we’re going to have that in evidence, you’re going to be able to see that. So hopefully we can avoid the de begging issues.”
Digitizing the dollar – and beyond
Naves echoed that the Wyoming stable token is in part a response to the reluctance of the Federal Reserve to create a central bank digital currency, or CBDC, at the federal level. According to Atlantic Council, there are more than 30 countries piloting a CBDC, including the digital euro, and 19 of the G20 countries are now in the advanced stages of developing one.
CBDCs have been widely criticized due to concerns around privacy and surveillance on government-run blockchains. But Naves said that wouldn’t apply here since Wyoming plans to use public blockchains, such as Ethereum or Solana, instead of private networks. The group hasn’t specified exactly which networks it’ll use but has said it wants the coin to be available on several different platforms.
If it’s successful, it could go beyond the dollar.
“Down the road, the intent is to utilize the same technology … to enable other elements to turn into tokens and be on blockchains, whether it is commodities such as gold or oil, whether it is real estate, other governmental obligations – those are still to be determined,” Naves said. “But the success of this initial use case, which is digitization of the U.S. dollar, is the one that is going to enable other use cases to proceed.”
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