Stable Wyoming

Wyoming is all set to launch a stablecoin that will — if all goes to plan — help to fund education in the state.

Why it matters: An actual U.S. state getting directly into the cryptocurrency business is a real vote of confidence in the future of digital ledger technology.

The big picture: Stablecoins are thought of as the most successful blockchain product to date.

• They're a huge topic in the payments space. For large, global transactions, their time to final settlement is attractive.
• Their collective market capitalization is $169 billion.

How it works: Wyoming's version — which doesn't have a final name or ticker yet — will be backed by actual dollars, fairly short-term U.S. Treasuries and related repurchase agreements.

• One day, Wyomingites could use the token on a day-to-day basis but, according to the state commission's executive director, the initial vision is to enter into the same market as existing stablecoins, with the idea that transparent, public policies could be a difference maker for a category of users.
• The state will make money like other stablecoin issuers do: off the interest earned on those Treasury holdings. And any profits will go to fund schools in the state.
• "In that capacity it's a public good," Anthony Apollo, executive director of the Wyoming Stable Token Commission, tells Axios.

Catch up fast: In early 2023, the Wyoming legislature passed a law that would create a state "stable token," designed like Circle's USDC or Paypal's PYUSD, in that it's all based on highly liquid deposits.

• The commission was convened with about $6 million appropriated by the state to launch the product. It was initially made up of the governor, the state auditor and the treasurer.

State of play: Apollo and his collaborators have been working to tick items off the to-do list, such as working out the procurement process for vendors that can make the stablecoin a reality.

• They're getting ready for a rulemaking process that will effectively lock in the terms and conditions for the token and hiring the rest of the commission's staff.

The plan is for the stablecoin to launch in the first quarter of 2025.

• "We've got all the green lights here," Apollo says.

The intrigue: The deliberate openness of government processes will be a selling point for the token, Apollo contends.

• That's because the instrument's terms and conditions will be a matter of public rulemaking. As such, they can't change quickly.
• Because they will evolve at a deliberate pace, all in public, that should lower the counterparty risk for its users, he believes.

What we're watching: There's always a chance the feds express displeasure about the product, but they don't tend to do anything until ideas become reality, so there's just no way to know how D.C. will react.

The bottom line: Wyoming has consistently been one of the most progressive states from the perspective of the blockchain industry, passing dozens of pieces of legislation on the topic so far.

• "From a stable token perspective, there's really no one else working on this as a state," Apollo says.