In July, the American state of Wyoming shared an open job position for the head of its Stable Token Commission.
The executive will work alongside Wyoming’s governor, state auditor, state treasurer and four expert appointees to bring the state’s very own stablecoin to life.
While Wyoming was the first to pass a law on a state stablecoin, it isn’t the only state considering launching its own digital currency.
In April, a similar initiative was proposed in Texas, where lawmakers introduced bills for creating a state-based digital currency backed by gold.
However, the idea of state stablecoins raises many questions: How would they affect the monetary stability of fiat money and the power of the Federal Reserve? Could they be compatible with a central bank digital currency? Do people really want to return to a system with state banks printing their own monetary notes?
The Wyoming experiment
The Wyoming Stable Token Act was originally introduced in February 2022, in the midst of the crypto market crisis. The bill defines the Wyoming stable token as a virtual currency representative of and redeemable for one U.S. dollar held in trust by the state of Wyoming. Basically, the state would tokenize the federal currency on a 1:1 ratio with deposits.
NEWS–bipartisan group of top #Wyoming legislators proposed a bill for State of Wyoming to issue a #stablecoin, 100% backed by USTreasuries, where the State keeps the float. I see pros & cons (didn’t know it was coming) but❤️that Wyoming continues to explore cool #crypto ideas! https://t.co/BXbELukUQE
Explaining why state lawmakers took such an interest in the digital token project, Chris Rothfuss, the minority leader in the Wyoming State Senate, told Cointelegraph:
“Wyoming needs to be able to transact in a digital currency — to accept payments, to make payments, and to do so without risk. The Wyoming stable token is the solution to that challenge.”
A notable reservation in Section 2 of the Stable Token Act makes the state’s attorney general responsible for monitoring the startup phase of the token’s issuance. Should the attorney general believe it contradicts federal or state law, the project would be frozen.
The bill also sets a deadline for the project: The commission’s director shall provide their report on the doability of the stable token no later than Nov. 1, 2023.
Other than that, the document doesn’t specify much; instead, it establishes the Stable Token Commission with the authority to craft further details.
The legislation’s path wasn’t easy. In March 2022, Governor Mark Gordon vetoed the bill, saying he was “unconvinced” that the state’s Treasury was ready to implement the project safely.
Gordon criticized the lack of information and the cost of accounting services, blockchain development and other necessary expenses, and he was skeptical of the project’s purported benefits.
A year later, the governor applauded the effort made by legislators to enhance the document, but voiced new reservations:
“First and foremost, there was no overall plan (a ‘business plan’ for lack of a better term) or, if a plan exists, it did not appear to have been used to guide the legislators in crafting the legislation.”
On March 22, 2023, the Stable Token Act was passed into law without Governor Gordon’s signature. Gordon recognized the state stable token’s potential to “nurture Wyoming’s reputation as a leader in the digital asset world” and deemed the improvements made by the bill’s authors enough to allow it to become law.
The era of multiple stablecoins?
Neither the U.S. Federal Reserve nor any crypto-focused legislators have reacted publicly to the Wyoming project, but it is hard to imagine any kind of affirmative response, given that the American dollar was established precisely to provide a countrywide monetary standard and bring the currency under the purview of the federal government.
So, in principle, any state token project could contradict the logic of central bank currency to a similar degree as private cryptocurrencies.
At the same time, the potential value of Wyoming’s stable token is rigorously tied to the same old American dollar, which makes it less of a separate currency and more of a state-issued financial asset, similar to the state-issued notes for specie of the 19th century.
A $40 note issued by the State Bank of Georgia in 1855. Source: Southern Style Currency
Rothfuss clarified, “We are not issuing a new currency. The Wyoming stable token is a digital representation of a U.S. dollar held in trust by the state of Wyoming on behalf of the tokenholder. We are not competing with the Federal Reserve — we are enabling a technology.”
Some observers still see a potential conflict between the states and the Fed. “Certainly, there will be a tussle between states and the federal government over the former attempting to issue their own stablecoins,” Brent Xu, CEO of Web3 bond-market platform Umee, told Cointelegraph.
But there could be a compromise in which the Federal Reserve allows states to issue stablecoins under a particular framework, he believes, noting the discussions concerning a national framework for stablecoins.
Zachary Townsend, CEO of Bitcoin-based life insurance provider Meanwhile, doesn’t see any potential problems with state stablecoins, as he believes that the very concept of a stablecoin is open to almost any entity, political or corporate, as the recent example with PayPal’s initiative has shown.
He told Cointelegraph, “There are going to be tons of private stablecoins. If I just looked at my life and all the companies I have ‘accounts’ or ‘wallets’ or ‘balances’ with, those are going to transform to become stablecoins within a few years.”
This is something Peter Herzog, state policy lead at the Crypto Council for Innovation, can agree with. “There are a variety of models for stablecoins that involve different decisions around underlying collateral, governance and more,” he explained to Cointelegraph. For Herzog, it comes as no surprise that individual states with an active interest in crypto are continuing their experiments with new initiatives:
“Until we see a federal regulatory framework, it is likely that states continue to step in to create rules of the road to promote innovation and protect consumers.”
Sir Keir Starmer has said his government stands ready to use industrial policy to “shelter British business from the storm” after Donald Trump’s new 10% tariff kicked in.
But a global trade war will hurt the UK’s open economy.
The prime minister said “these new times demand a new mentality”, after the 10% tax on British imports into America came into force on Saturday. A 25% US levy on all foreign car imports was introduced on Thursday.
It comes as Jaguar Land Rover announced it would “pause” shipments to the US for a month, as firms grapple with the new taxes.
On Saturday, the car manufacturer said it was working to “address the new trading terms” and was looking to “develop our mid to longer-term plans”.
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2:53
Jobs fears as Jaguar halts shipments
Referring to the tariffs, Sir Keir said “the immediate priority is to keep calm and fight for the best deal”.
Writing in The Sunday Telegraph, he said that in the coming days “we will turbocharge plans that will improve our domestic competitiveness”, adding: “We stand ready to use industrial policy to help shelter British business from the storm.”
It is believed a number of announcements could be made soon as ministers look to encourage growth.
NI contribution rate for employers goes up
From Sunday, the rate of employer NICs (national insurance contributions) increased from 13.8% to 15%.
At the same time, firms will also pay more because the government lowered the salary threshold at which companies start paying NICs from £9,100 to £5,000.
Sir Keir said: “This week, the government will do everything necessary to protect Britain’s national interest. Because when global economic sands are shifting, our laser focus on delivering for Britain will not. And these new times demand a new mentality.”
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2:51
Trump defiant despite markets
UK spared highest tariff rates
Some of the highest rates have been applied to “worst offender” countries including some in Southeast Asia. Imports from Cambodia will be subject to a 49% tariff, while those from Vietnam will face a 46% rate. Chinese goods will be hit with a 34% tariff.
Imports from France will have a 20% tariff, the rate which has been set for European Union nations. These will come into effect on 9 April.
Sir Keir has been speaking to foreign leaders on the phone over the weekend, including French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and Australian Prime Minister Anthony Albanese, to discuss the tariff changes.
A Downing Street spokesperson said of the conversation between Sir Keir and Mr Macron: “They agreed that a trade war was in nobody’s interests but nothing should be off the table and that it was important to keep business updated on developments.
“The prime minister and president also shared their concerns about the global economic and security impact, particularly in Southeast Asia.”
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Crypto-friendly billionaire investor Bill Ackman is considering the possibility that US President Donald Trump may pause the implementation of his controversial proposed tariffs on April 7.
“One would have to imagine that President Donald Trump’s phone has been ringing off the hook. The practical reality is that there is insufficient time for him to make deals before the tariffs are scheduled to take effect,” Ackman, founder of Pershing Square Capital Management, said in an April 5 X post.
Trump may postpone tariffs to make more deals, says Ackman
“I would, therefore, not be surprised to wake up Monday with an announcement from the President that he was postponing the implementation of the tariffs to give him time to make deals,” Ackman added.
On April 2, Trump signed an executive order establishing a 10% baseline tariff on all imports from all countries, which took effect on April 5. Harsher reciprocal tariffs on trading partners with which the US has the largest trade deficits are scheduled to kick in on April 9.
Ackman — who famously said “crypto is here to stay” after the FTX collapse in November 2022 — said Trump captured the attention of the world and US trading partners, backing the tariffs as necessary after what he called an “unfair tariff regime” that hurt US workers and economy “over many decades.”
Following Trump’s announcement on April 2, the US stock market shed more value during the April 4 trading session than the entire crypto market is currently worth. The fact that crypto held up better than the US stock market caught the attention of both crypto industry supporters and skeptics.
Prominent crypto voices such as BitMEX co-founder Arthur Hayes and Gemini co-founder Cameron Winklevoss also recently showed their support for Trump’s tariffs.
Ackman said a pause would be a logical move by Trump — not just to allow time for closing potential deals but also to give companies of all sizes “time to prepare for changes.” He added:
“The risk of not doing so is that the massive increase in uncertainty drives the economy into a recession, potentially a severe one.”
Ackman said April 7 will be “one of the more interesting days” in US economic history.