The Federal Reserve has no immediate plans to launch a central bank digital currency (CBDC) to digitize the dollar, so Wyoming is pioneering its own stablecoin.
The Wyoming state token could be launched as soon as Q1 25, according to CNBC. While the stablecoin will utilize the Solana network, Wyoming has yet to select the partners that will provide the exchange and wallet services.
Once the framework is established, Wyoming consumers will be able to use the tokens to pay for everyday purchases. The state also plans to invest the stablecoins’ reserves in instruments like treasury bonds, with any returns being used to fund the state’s public schools.
“It’s no surprise that Wyoming is looking to leverage the Solana blockchain for their stablecoin, as it’s currently the fastest blockchain,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research “Once the Firedancer upgrade happens on the Solana blockchain, there will likely be a significant shift of development with payment providers and other financial institutions. After Custodia Bank was denied from the highest level, Wyoming isn’t giving up, and it’s very encouraging to see innovation thrive in this state.”
Nimble and Entrepreneurial
Wyoming-based Custodia Bank, which provides custody services for crypto and digital assets, sued the Federal Reserve of Kansas City in an attempt to gain access to a master account and membership with the Fed. Although the lawsuit was dismissed in March, the bank said it would continue to resist the Federal Reserve’s “strong-arm tactics.”
While the stablecoin launch is not in opposition to the Federal Reserve, the Fed has delayed the introduction of a CBDC due to concerns about consumer privacy and security. According to Wyoming Governor Mark, the Wyoming state token could serve as a model for the Fed’s digital dollar.
“It is clear to me is that digital assets are going to have a future,” Gordon told CNBC. “The United States has to address this issue. Washington’s being a little bit stodgy, which is why Wyoming, being a nimble and entrepreneurial state, can make a difference.”
Akin to Switzerland
Amid the uncertainty surrounding the crypto industry, many regulators have shown greater support for stablecoins, which are less volatile than many cryptocurrencies. A successful launch of the Wyoming state token could have widespread ramifications.
“Wyoming has been the leading state in crypto acceptance, and it is attempting to maintain that lead,” Hugentobler said. “Their stance on crypto is akin to that of Switzerland—they fully support it and they have passed roughly 30 laws to help push innovation while still protecting consumers.”