Wyoming's stablecoin enters testing
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The state of Wyoming is testing its stablecoin on multiple blockchains, state officials confirmed Wednesday.
Why it matters: As the U.S. government gets closer to passing laws establishing a legal framework for stablecoins, more entities are seeking to launch these instruments.
State of play: PayPal, probably the first major brand in the game, made news with its stablecoin a little over a year ago.
- Fidelity is testing one. Custodia and Vantage Banks just issued one. Bank of America said it will likely get in on it, too.
- And World Liberty Financial, the DeFi effort supported by the Trump Organization, announced its own this week.
Wyoming's is notable in that it comes from domestic government. And the coin, WYST, would be a flex by a state that has long embraced the crypto industry.
- The widening race to develop stablecoins is being driven by the expectation of lessening regulatory friction, but Wyoming Gov. Mark Gordon yesterday said the state — which started this process with 2023 legislation — wants to be above all that.
What they're saying: Gordon, speaking at the Chamber of Digital Commerce's DC Blockchain Summit Wednesday, explained why he thought a conservative approach to a state stablecoin makes sense.
- "Everybody's seeing trillions of dollars coming their way. Everybody wants to kind of establish a new thing right away," he said.
- Gordon wants Wyoming to be "prudent," with a slightly overcollateralized backing and a strong commission to bring the token about.
- Profits from the coin will support the school system.
Zoom in: The state published testnet addresses for the seven blockchains where it's running tests: Avalanche, Solana, Ethereum, Arbitrum, Optimism, Polygon and Base.
- Around distribution, it's working with LayerZero, the interoperability team behind Stargate.
- The stablecoin will ultimately be multichain but will start on just one.
Friction point: Wyoming's process ruffled some feathers. Charles Hoskinson, Wyoming resident and founder of the Cardano blockchain, has expressed anger that his chain didn't get a chance to make a bid to be part of the process.
- "Perhaps this entire enterprise should have never happened in the beginning," he said in November.
The big picture: New stablecoins are hot.
- But so far, stablecoins are a Coke and Pepsi situation. There is Tether's, there is Circle's, and then there is everyone else.
