Long gone are the days when venture capital flowed into fintech startups with bold ideas – and couldn’t show the metrics and business fundamentals.
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As crypto investing becomes more playful and institutionalized with bitcoin ETFs, Wyoming is driving the next phase of growth for crypto: consumer payments.
The state is creating its own US dollar-backed stablecoin, called the Wyoming stable token, which it plans to launch in the first quarter of 2025 to offer individuals and businesses a faster and cheaper way to transact while creating new revenue streams for the state. . The group behind it hopes to serve as a model for a digital dollar at the federal level.
Success will be the “adoption of stablecoins … that are transparent, that are fully backed by short-term Treasurys (and) that are dependent on the dollar,” Wyoming Governor Mark Gordon told CNBC at the Wyoming Blockchain Symposium in Jackson Hole. “One of the most important things for me is to be able to bring the debt back on land, because if it is bought by treasuries and supported by Treasurys, it will help stabilize the market at a rate.”
“It’s clear to me that digital assets are going to have a future,” Gordon said. “The United States needs to address this issue. Washington is a bit stodgy, so Wyoming, as a vibrant and entrepreneurial state, can make a difference.”
The Cowboy State is not new to pushing the boundaries of business law. In 1977, he created an LLC and has passed more than 30 crypto laws to create a favorable regulatory environment for businesses and investors as of 2018.
The development in the project is lean while many participants of the crypto market are wondering what to do next. Making bitcoin ETFs available to US investors in January is a huge achievement. This is the result of more than 10 years of effort by the industry, and sent prices to new records this year. But even though the market is still bullish, trading has been going on for months.
Additionally, crypto and the underlying blockchain technology were always intended to be used for more than price speculation. Consumer payments, in many cases via stablecoins, are generally seen as the killer application for crypto and the gateway to the adoption of this technology.
The vision
Wyoming is currently reviewing potential partners and vendors with other technology expertise to help build a stable token. Will require exchange providers and wallets – Coinbase and Kraken, for example, offers both – to continue buying tokens. The country plans to issue tokens to exchanges so that exchanges can issue them to retail users. From there, it’s probably just another payment method for every day, said Flavia Naves, a commissioner at the Wyoming Stable Token Commission.
“If you walk into Cowboy Coffee in Jackson, Wyoming, and you want to buy a latte, there will be a wallet in Solana that you can use to buy coffee with Wyoming tokens,” he said, describing the vision. that stablecoin.
It also has a public interest: the commission plans to invest the reserves generated by each token in circulation into Treasurys and reverse repos, and use the interest generated on these investments to finance public schools.
At the conference, Gordon emphasized the importance of resisting the urge to focus too much on how much money the country can spend here and prioritize reserve management.
Maintain parity
Stablecoins are supposed to maintain parity with the underlying asset, usually the US dollar, but they can and have deviated from the peg 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 reserve to divert potential and full transparency to establish and maintain public trust.
“There is a publicly available audit of how many tokens (are) in circulation (and) how much money is in the bank account, so you can see if there is a 1-to-1 (stablecoin-to-dollar ratio),” he said. . “This is a public token and also a public service, all information is available.”
The commission invites the public almost to the meetings on the stable token and posts the minutes to the website afterwards.
“It’s been reserved and part of what we’ve done … is to make sure we can recover whatever we’re going to do,” Gordon said. “Plus the fact that we rule says that if people buy Treasury or repo, we will have evidence, you will be able to see it. So hopefully we can avoid the problem of begging.”
Digitizing the dollar – and beyond
Naves echoed that Wyoming’s stable token is a response to the Federal Reserve’s reluctance to create a central bank digital currency, or CBDC, at the federal level. According to the Atlantic Council, there are more than 30 countries piloting a CBDC, including the digital euro, and 19 of the G20 countries are currently at an advanced stage of developing one.
CBDCs have been widely criticized due to concerns about privacy and surveillance in government-run blockchains. But Naves said that won’t apply here because Wyoming plans to use a public blockchain, such as Ethereum or Solana, instead of a private network. The group hasn’t specified exactly which network it will use, but says it wants the coin to be available on several different platforms.
If successful, it could go beyond the dollar.
“On the road, the goal is to use the same technology … to enable other elements to become tokens and be on the blockchain, whether commodities such as gold or oil, whether real estate, other government obligations – that is still to be determined,” said Naves. “But the success of this initial use case, which is the digitization of the US dollar, is what will allow other use cases to take place.”
