- Wyoming to launch the first state-issued, dollar-backed stablecoin (WYST).
- The stablecoin will be backed by U.S. Treasury assets and repurchase agreements.
- The initiative aligns with national efforts for stablecoin regulation and digital currency infrastructure.
Wyoming is set to become the first state in the US that will issue a state-issued stablecoin pegged 1:1 to the US dollar. Governor Mark Gordon announced the plans for the stablecoin, called WYST, which is expected to be launched in July of this year. This move aligns with Wyoming’s strategic plan of transforming the state into a hub of digital finance.
A Fully Dollar-Backed Stablecoin
According to the report, the Wyoming stablecoin will be fully backed by cash on reserves held in trust by the state. The stablecoin will be supported by US Treasury assets and repurchase agreements. For Wyoming’s plan, the minimum capitalization for the token will be set at 102%. The state intends to get its revenues from the interest income earned on these reserves. This revenue will be used in funding various state-driven projects such as education and infrastructure.
Speaking on Wednesday at the DC Blockchain Summit, Governor Gordon attributed Wyoming’s ability to go forward with the project to the state’s regulatory framework. He stated that, currently, no banks have been particularly proactive about adopting stablecoin technologies but that the regulatory environment in Wyoming is rather favorable for such projects.
A Strategic Move for Wyoming
The decision to launch the stablecoin comes at a time when there is a shift in focus on stablecoin and cryptocurrency regulation. While the state had voted against crypto reserves mainly because of the fluctuating prices, the efforts toward the creation of a state-backed stablecoin signal the gradual adoption of digital assets.
The WYST stablecoin will be issued from 9 potential blockchain networks, such as Ethereum, Solana and Polygon. Governor Gordon believes that the launch could position Wyoming at the forefront of the digital payment ecosystem. This type of initiative could potentially be a suitable foundation for other states or even federal initiatives, which can be more secure and regulated compared to private sector stablecoins.
Federal Support for Stablecoin Regulation
The stablecoin initiative aligns with other national strategies to regulate digital currencies. US President Donald Trump has encouraged the passing of legislation that supports stablecoins in Congress. He reckons that if the legal framework is clear, more firms would be able to venture into the industry. This also aligns with Wyoming’s move, which may set the scene for other states to come up with similar initiatives.
Currently, there are two major bills in the U.S. Congress concerning the legislation of stablecoins. These are the GENIUS Act, which pertains to payment tokens, and the STABLE Act, which targets algorithmic stablecoins. If passed, these bills can give better leads toward shaping the digital currency industry.
Governor Gordon highlighted that the stablecoin project aligns well with the future regulation of digital assets, given that Wyoming passed the Wyoming Stable Token Act in 2022. This law outlines the legal requirements needed to launch the WYST token.
