Wyoming appears to be the first state that will issue its own stablecoin.
The stablecoin market is in the process of exploding. USDT, issued by Tether, surpassed $150 billion. Meanwhile, analysist are predicting growth of more than 600% in the stablecoin market by 2030.
Much of our recent focus is on the GENIUS Act and what the US government is doing. Then we have the ever-present Michael Saylor and STRATEGY's bitcoin accumulation. When it comes to stablecoins, we have an overlooked entrant about to go live.
WYST: The First State Issued Stablecoin
The Wyoming Stable Token Act passed in March 2023. Like most of these bills, many of the details were not covered by the media. When bills are passed, there are certain points that get most of the attention. With this, the legal structure of DAOs, if my memory is correct, was the headline.
However, there evidently was something else in there which is becoming of great importance. The bill allowed the state to offer its own stablecoin. This is the "WYST",
It is a major move when it goes live on July 4th, 2025.
WYST is said to be "the first fully-reserved, fiat-backed stable token issued by a U.S. public entity."
This is an asset backed token, following the common structure we see with companies such as Circle.
Wyoming’s commission will issue the WYST stablecoin pursuant to the Wyoming Stable Token Act passed in March 2023. The asset will be fully backed by U.S. Treasurys, cash, and repurchase agreements.
It most likely will use the 80/20 format. The cash backing will amount to 20% while the securities will likely be short-term (such as T-Bills), reaching the 80% mark.
Interest accumulated by the state will be used to fund the Wyoming Schools Foundation Fund. The state is operating the same mindset as a company such as Circle.
Is This A CBDC?
Seeing a government involved will cause many to jump to the claim this is a Central Bank Digital Currency (CBDC). This is actually incorrect. In fact, it isn't even close.
Those outside the United States might be forgiven for jumping to that conclusion. There is an interesting dynamic between states and the Federal Government. It is a proverbial battle where certain laws can override others.
As it pertains to this discussion, the WYST is not legal tender. These are not dollars but, rather, a dollar-pegged asset (token). In this regard, it is identical to USDC. As we can see, the backing is of similar makeup.
In fact, the single difference appears to be the issuer. USDC is a private company (albeit regulated like a bank) whereas WYST is done by a state. Like USDC, this is multi-chain.
According to Grok:
The token operates on multiple blockchain networks, including Ethereum, Solana, Avalanche, Arbitrum, Optimism, Polygon, and Base, using LayerZero’s Omnichain Fungible Token (OFT) standard for cross-chain interoperability.
Another major difference is the fact that a CBDC is would completely open to the Federal Government. This is one of the major flaws. By removing the commercial banking system, there is no wall between the Feds and one's wallet. In other words, no court ruling is required.
WYST comes under the state's privacy laws. That means the state can tell the Feds to pound sand. To have anything done, the Fed's would head to court and get a ruling in their favor, same as with the banks.
The final point is that nobody is required to use WYST. Wyoming State law does not usurp the legal tender laws of the country. Residents in Wyoming are free to use the US dollar through their banks, same as always. The state is required to accept the dollars as payments for things such as fines and taxes. Businesses cannot reject the USD as payment.
Of course, all those entities are free to accept WYST as payment, the same as they could accept BTC, ETH, or some memecoin.
Big Step For The Stablecoin Market
While the US Congress fights over the stablecoin bill, potentially affecting the entry of many private companies, there is nothing preventing states from following Wyoming. There are 50 of them, containing 350 million people.
Will other states follow Wyoming's lead? I have not heard of any other making a similar proposition. However, if this does prove successful, we might see others jump on board.
There is always the potential that other services could be tied to this stablecoin. Perhaps the residents eventually drift away from the US dollar (the currency), instead opting for a dollar pegged asset. It ultimately will boil down to what people decide.
To me, the advantage here is more choices. Another set of stablecoins rolling out is of benefit to the public. Those that choose to transact using them will be served with greater options.