Wyoming Gov. Mark Gordon last Friday allowed the Wyoming Stable Token Act to become law without his signature, noting in a two-page letter to Secretary of State Chuck Gray that while the legislation is an improvement over a similar bill he vetoed last year, the new legislation lacks the “solid plan” required for the state to begin issuing a digital currency.
Wyoming’s stablecoin, which isn’t yet named, is to be fully backed by state holdings in U.S. treasury bills. Stablecoins, as the name suggests, are a type of cryptocurrency designed to hold a relatively constant value, usually by tethering its price to a commodity or more traditional currency. In his letter, Gordon said he still has “some reservations about the potential impact this program may have on Wyoming’s hard fought reputation as a thoughtful leader in the world of digital assets.”
Wyoming, which many other states and local governments look to when drafting new banking codes or financial frameworks, would be the first state government to issue its own stablecoin if the initiative outlined by the legislation is successful. The bill authorizes the creation of a commission to manage the project, the issuance of the tokens and provisions for staffing and funding. The bill appropriates $500,000, though Gordon said this may not be enough funding and that the legislation is vague on staffing needs.
“I fear, though, that less thought was given to the detailed implementation of such a program perhaps than to the imagined prospects of success,” Gordon wrote. “First and foremost, there was no overall plan (a ‘business plan’ for lack of a better term) or, if a plan exists, it did not appear to have been used to guide the legislators in crafting the legislation. Even more concerning, is that this legislation does not require such a plan before an expensive director is hired.”
Gordon called for a more thorough accounting of potential costs, a list of criteria for a qualified director and a timeline for meeting state requirements and negotiating contracts.
“Innovation does not always wait for the perfect, rather it emerges, is refined, and eventually becomes established,” he wrote. “Still, first movers are not always rewarded. They are, however, vital to progress.”
Two digital tokens that were first movers at the local government level — MiamiCoin and NYCCoin — were last week suspended from being traded on their main exchange after a period of low liquidity, though these currencies were not created by or even officially endorsed by those cities. But Gordon said Wyoming’s stablecoin “could be a great achievement” that “could provide significant revenue to the state particularly with interest rates rising as a result of the Federal Reserve policy.” He also floated a concern, though, about the level of public demand for a state-issued cryptocurrency.
Gordon, a Republican who took office in 2019, revealed in 2021 that he owned cryptocurrencies and has compared his state to Delaware, New York City and Miami — locales that have enticed entrepreneurship through their innovative financial regulations. Gordon said he will sit on the new commission in hopes of making the coin a success.
“No doubt, the legislature will benefit from our work in this regard and will be better equipped to make adjustments to this enabling act in the years to come should this endeavor come to fruition unmolested by the federal government,” he wrote.