Innovative Development: Wyoming Leads the Charge for Seamless Payments with Its Unique Stable Token
Wyoming is on track to become the first state in the United States to introduce its own stable token, which is specifically designed to enable seamless transactions and potentially eliminate the expensive credit card fees imposed on merchants. The stable token was officially approved by Governor Mark Gordon on March 18, 2023. Previously, the governor vetoed an earlier iteration of the stable token, but he has since been satisfied with the progress made by lawmakers to address his concerns. Gordon recognized the inevitability of digital currencies becoming an integral part of the financial landscape in the future, commending Wyoming’s efforts as “commendable”.
A fundamental aspect of Wyoming’s stable token is its capacity to abolish credit card fees incurred by merchants. The American CryptoFed DAO, a decentralized autonomous organization, has already endorsed the token for such transactions. The initiative is backed by the Merchant Advisory Group, representing numerous major retailers in the US with over $4.8 trillion in annual sales across more than 580,000 locations nationwide. The group estimates that if merely 5% of their transactions were conducted using Wyoming’s stable tokens, the expected returns for the state, based on a month of T-bills at 3.86% interest, would be approximately $9.3 billion.
However, federal authorities have heavily scrutinized some of Wyoming’s digital asset firms, denying Custodia Bank’s request for access to the Federal Reserve system. Regulators asserted that the bank’s measures against money laundering and terrorism financing were inadequate. Additionally, the American CryptoFed DAO is currently facing issues and an enforcement action from the Securities and Exchange Commission, following its attempt to register its two tokens with the agency. Chief Financial Officer Xiaomeng Zhou has expressed hope that the DAO’s case will shed light on the generally non-cooperative behavior of federal regulators towards digital asset companies.
Senator Chris Rothfuss, a pivotal figure in the formulation of the Wyoming stable token, has expressed confidence that the SEC cannot obstruct the token as the program is designed in a way that does not classify it as a security. Each stable token serves as a digital representation of an individual US dollar, securely held in trust for the token holder. To ensure the token’s backing, Wyoming will invest in short-term US treasuries, which will generate interest revenue for the state. These earnings will be allowed to accumulate until they reach 102% of the total value of all tokens, guaranteeing there will always be ample cash reserves to redeem them.
Wyoming’s legislators remain hopeful about the stable token’s future, with a target date of December 2023 for the initial token launch.
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