For a country with a small-town feel, Wyoming is steadily moving to the big city when it comes to cryptocurrencies. Wyoming’s stablecoin could debut before the end of 2022, according to a bipartisan bill that was submitted to the legislature last week. The announcement surprised even Wyoming banker and crypto master Caitlin Long.
“I didn’t know this would happen,” the head of Avanti Bank wrote on Twitter.
It also raises some questions: Do the people of Wyoming really need a stable currency? Is it possible? Wouldn’t this upset state-owned commercial banks, including newly created Special Purpose Depository Institutions (SPDIs) such as Avanti, which have released a product similar to the stablecoin itself?
Also, is the government stablecoin constitutional? Aren’t there enough stacked coins around already? On the other hand, maybe Wyoming is once again ahead of cryptocurrencies – at least in the US – and other cities and states will join in the win soon?
“With regulators still trying to ‘understand and deal with encryption’, anything a country like Wyoming does that introduces a new data point will have an impact,” Rohan Gray, assistant professor of law at Willamette University, told Cointelegraph. to be. “are seen as part of the scene,” to which US regulators and even Congress had to respond.
Senate Minority Leader Chris Rothfuss, one of Wyoming’s four stablecoin backers, told Cointelegraph that many people in Wyoming and beyond are still reluctant to use stablecoins “because they don’t trust the assets” behind them. Can the token be exchanged for US dollars upon request?
“It’s still a question mark” for many people, Rothfuss said. With the Wyoming stablecoin, “they want to know they will be 100% backed by US government bonds.”
Wyoming has been at the forefront of the amazing global expansion of cryptocurrencies. It was the first U.S. state in 2020 to establish specialized custodial institutions that are allowed to hold cryptocurrencies alongside securities, and the first U.S. state in 2021 to recognize Decentralized Autonomous Organizations (DAOs) and grant them the same rights as limited responsibility. . . Comp.
Wyoming State Capitol Building. Source: Bradlions
Maybe not this year
Under the bill, when a Wyoming cashier determines that stacked coins are possible, the official would be required to “issue a Wyoming stacked coin by December 31, 2022.”
Does this mean we will likely see a stable Wyoming currency before the end of the year? Passing the law this year “is going to be a little tricky,” Rothfuss told Cointelegraph, but at least “we’ll get some feedback.” However, there is no doubt that if the bill is not passed this year, it will be returned next year.
What about private banks in Wyoming, do they have a problem with a government entity competing for retail deposits or maybe even their stack coins? As mentioned above, Avanti Bank, which is the second SPDI in Wyoming after Kraken Bank (both leased out at the end of 2020), already has a product called Avit, described on the website as “token and programmable USD”, which is very similar to a stable currency. Will Wyoming stablecoin compete with Avanti Bank?
Rothfuss told Cointelegraph that he did not intend for Wyoming’s stablecoin to compete with Avit, although he had not previously discussed his proposal with Long either. “We’re not going to buy an independent business.”
Demand for digital assets is expected to grow exponentially in the coming years, Rothfuss continued, and there is room in the country for both government-issued digital stack coins and private banks.
In her tweet, Long also called the Feb. 17 bill “mind-blowing” that raises “a lot of questions,” adding that she loves that “Wyoming continues to explore good cryptocurrency ideas!” Avanti did not respond to Cointelegraph’s request for comment for this story.
What about the technology: Will the Wyoming stablecoin be built on the Ethereum platform, like many but not all stablecoins?
“For now, we are technologically neutral,” Rothfuss said. Wyoming may use the Ethereum blockchain, the Solana blockchain, or others. He added that it could be ideal if the stablecoin could eventually run on multiple blockchains. However, it is still too early to make technical decisions.
Some wonder if a stablecoin minted to the ground would be legal under US law. After all, only Congress has the power to regulate the circulation of money in the United States. Can a government stablecoin be considered unconstitutional?