Wyoming is the first US state to introduce a fiat-backed stablecoin: WYST is intended to develop new economic potential and support agriculture

Wyoming is the first US state to introduce a fiat-backed stablecoin: WYST is intended to develop new economic potential and support agriculture

Wyoming is the first state in the US to launch a stable crypto token

Wyoming has announced that it will launch its own cryptocurrency by July 2023. This makes the state the first in the US to issue a fiat-backed, fully reserved stablecoin. The coin, which will be called WYST, is backed by cash, U.S. Treasury securities and repurchase agreements and is committed to maintaining at least 102% in reserves. This information was announced during the DC Blockchain Summit.

WYST as a potential source of revenue for Wyoming

Governor Mark Gordon commented on banks' slow development of stablecoins, emphasizing: "I don't think there are any banks that have been really eager." He recalled a previous conversation with JPMorgan CEO Jamie Dimon in which he praised the virtues of Wyoming as a location for such innovation. The goal of the WYST coin is to raise new revenue for the state. Wyoming plans to use the interest generated by the reserves to fund education and infrastructure. Gordon also sees potential for agriculture: "It can also be a tool that farmers and ranchers can use to develop new markets."

Structure and market potential of WYST

WYST is intended to be pegged to the US dollar and is designed to hold a value of 1:1 with the dollar like other stablecoins. The focus on stablecoins is also growing in companies such as Visa, PayPal and Stripe, which are developing projects in this area or building their own stablecoins. Other states such as Texas and Utah have discussed similar proposals, but Wyoming has moved more quickly.

Wyoming has spent nearly a decade preparing for this moment, passing over 45 crypto-related laws since 2016 to reduce its reliance on fossil fuels. To date, more than 1,000 LLCs containing names containing “crypto,” “blockchain,” or “DAO” are registered in the state.

Challenges and concerns

However, the results of efforts in Wyoming have been mixed. In 2023, the state invested $2 million in crypto-related projects but only received $473,000 back. Additionally, lawmakers recently rejected a proposal to create government crypto reserves, with critics citing the high volatility and unstable value of cryptocurrencies. Senator Cynthia Lummis floated the idea of ​​a national Bitcoin inventory but was met with resistance.

Technological considerations

Anthony Apollo, who leads the Wyoming Stable Tokens Commission, explained that the state is currently evaluating nine blockchains that could support WYST, including Solana, Ethereum and Polygon. A decision on this is still pending. While Wyoming is moving towards stablecoins, other states such as Montana, North Dakota and South Dakota have voted against the creation of crypto reserves.

Jennifer Schulp of the Cato Institute noted that lawmakers' hesitation is not surprising given the volatility of cryptocurrencies. To date, crypto reserve proposals have emerged in 24 states, however many of these initiatives have stalled.

Developments in other states

Parallel to Wyoming's push, other states are also experimenting with crypto reserves. Ohio has introduced bills to create state Bitcoin reserves, while Oklahoma is taking steps in a similar direction. However, it remains to be seen whether these plans will be implemented, as there are still discussions within the legislature regarding the use of public funds to purchase cryptocurrencies.

The future development of cryptocurrencies in the USA remains exciting and it is uncertain how Federal and Prospect States will deal with the increasing digitalization of currencies. However, Wyoming shows that it is taking a proactive approach and creating innovative structures to unlock new financial opportunities.