Gone are the days when venture capital poured into fintech startups with bold ideas but little performance in terms of business metrics and fundamentals.
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As crypto investing becomes more mainstream and institutionalized with Bitcoin ETFs, Wyoming is already driving the next phase of cryptocurrency growth: consumer payments.
The state is creating its own U.S. dollar-backed stablecoin, called Wyoming Stablecoin, which is scheduled to launch in the first quarter of 2025 to provide individuals and businesses with faster and cheaper ways to transact while creating new ones for the state. source of income. The team behind it hopes it will become a model for a digital dollar at the federal level.
Wyoming Governor Mark Gordon told CNBC at the Wyoming Blockchain Symposium in Jackson Hole that success would be “adopting a stablecoin… that is transparent, fully backed by our short-term Treasury securities (and) relies on Dollar”. “One of the most important things to me is being able to bring a lot of debt back home, because if that debt is purchased by Treasuries and backed by Treasuries, it will help stabilize the market to a certain extent.”
“It’s clear to me that digital assets are going to have a future,” Gordon said. “America has to figure this out. Washington is a little staid, which is why Wyoming can work as a nimble and entrepreneurial state.”
The Cowboy State is no stranger to pushing the boundaries of business law. It created an LLC in 1977 and has passed more than 30 pieces of crypto legislation since 2018, creating a favorable regulatory environment for businesses and investors.
While many cryptocurrency market participants wonder what happens next, development of the project is accelerating. The launch of a Bitcoin ETF to U.S. investors in January was a huge feat. It’s the culmination of more than a decade of hard work by the industry, with prices setting new records this year. But while the market remains bullish, trading has been range-bound for months.
Furthermore, cryptocurrencies and their underlying blockchain technology are intended for more than just price speculation. Consumer payments (in many cases via stablecoins) are widely viewed as cryptocurrency’s killer app and the gateway to mainstream adoption of the technology.
Vision
Wyoming is currently reviewing potential partners and vendors with additional technical expertise to help build the stablecoin. It will require exchanges and wallet providers – Coin library For example, Kraken offers two services – buying and holding tokens. The state plans to issue the tokens to exchanges so they can issue them to retail users. Wyoming Stablecoin Council member Flavia Naves said that from then on, it should be just another payment method in everyday life.
“When you walk into Cowboy Coffee in Jackson, Wyoming and want to buy a latte, Solana has their wallet and you can buy the coffee with Wyoming tokens,” she said, describing the company’s vision .
It also has a public interest slant: The board plans to invest the reserves backing every token in circulation into Treasury bills and reverse repos, and use the interest generated from those investments to fund its public schools.
At the meeting, Gordon stressed the importance of not focusing too much on how much money the country can make here, but instead prioritizing the impulse of reserve management.
maintain parity
Stablecoins are supposed to maintain parity with the underlying asset (usually the U.S. dollar), but they can and have drifted away from their peg due to surges or drops in demand (especially lack of liquidity, bad collateral, regulatory crackdowns, or network congestion).
Navis stressed that there will be a “buffer zone” in the reserves to deal with any potential deviations and provide full transparency to build and maintain public trust.
“The public can audit the number of tokens in circulation and the amount backed by bank accounts, so you can always see that there is a 1-to-1 (stablecoin to dollar) ratio,” she said. “It’s also a public token, so all information is available for any public service.”
The committee invites the public to attend meetings on stablecoins virtually and publishes meeting minutes to its committee website after.
“That’s completely reserved and part of what we’ve been working on… is to make sure that we can fully support whatever we do,” Gordon said. “Plus our legislation provides that when a person purchases Treasury bonds or repurchase agreements, we’ll have evidence and you’ll be able to see that, so hopefully we can avoid the begging problem.”
Digitizing the U.S. Dollar—and Beyond
Navis responded that the Wyoming stablecoin was partly a response to the Fed’s reluctance to create stablecoins. central bank digital currency, Or CBDC, at the federal level. according to atlantic councilCurrently, more than 30 countries are piloting CBDCs, including the digital euro, and 19 countries in the G20 are currently in the advanced stages of developing CBDCs.
CBDCs have been widely criticized due to concerns about privacy and surveillance on government-run blockchains. But Naves said that doesn’t apply here because Wyoming plans to use a public blockchain, such as Ethereum or Solana, rather than a private network. The organization has not yet specified which networks it will use, but said it hopes the token will be available on a number of different platforms.
If successful, its value could exceed the dollar.
“In the future, our intention is to use the same technology… to enable other elements to be converted into tokens and appear on the blockchain, whether it is commodities like gold or oil, whether it is real estate or other government obligations – these are still to be determined ,” Navis said. “But the success of this initial use case of digitizing the dollar will allow other use cases to continue.”
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