.svg)
Wyoming is set to become the first US state to issue a stablecoin by the end of the year after the state governor reluctantly allows the Stable Token Act to pass.
Governor Mark Gordon has allowed the Wyoming Stable Token Act to pass without his signature, almost exactly one year after he vetoed the first version of the bill.
The legislation will set up a Wyoming stable token commission, which will issue stablecoins by the end of 2023.
Each stable token will be held in trust for the token holder and can be converted into a US dollar on a 1 to 1 basis.
Wyoming will invest these funds into short-term US treasury bills, which will generate some interest earnings for the state. A part of that interest will be sent to the commission’s account to cover its operational costs. No interest earned on the stablecoins will be paid to individuals.
Through the issue of the stable token, state politicians intend to disrupt the existing payment ecosystem and create a new and more efficient way to pay.
American CryptoFed DAO, which was the first legally recognised decentralised autonomous organisation (DAO) in Wyoming and the US, said it is already working on the details of a pilot with merchants in the state and plans to enable the use of the stable token in daily retail transactions.
The DAO expects that this will generate billions of dollars in revenue for the state.
Last March, Gordon vetoed a similar bill despite it getting sweeping support in the state legislature.
The governor has now decided to let the new version of the act pass because the state legislature worked to resolve many of his concerns.
He added that he is also “not overly confident that another year of legislative deliberation will result in a clearer path forward”.
Gordon refused to put his signature on the bill, arguing that “Wyoming's hard-fought reputation” as a leader in the digital asset space might be at risk.
“There remains in the legislature and elsewhere a compelling enthusiasm to see a novel Wyoming stable coin set sail. I fear, though, that less thought was given to the detailed implementation of such a programme perhaps than to the imagined prospects of success,” the governor warned.
He also pointed out that there may not be a robust market for a Wyoming stablecoin “particularly considering recent developments”.
He raised further concerns about whether the initial $500,000 funding for the commission would be enough, the constitutionality of the act and whether it is right for the state to step in and issue a stablecoin or if it should have been left for the private sector to do so.
“Nevertheless, despite these concerns, enough improvements have been made to the legislation that I have decided to allow the Stable Token Act to become law without my signature.
“The idea is intriguing enough and furthermore has no hope of being resolved without further diligence,” the governor concluded.
The act became effective immediately.
