Wyoming is pushing crypto payments and trying to beat the Fed to a digital dollar
Long gone are the days when venture capital was flowing into fintech startups with bold ideas — and little to show 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 pushing into the next phase of growth for crypto: consumer payments.
The state is creating its own U.S. dollar-backed stablecoin, called the Wyoming stable token, which it plans to launch in the first quarter of 2025 to give individuals and businesses a faster and cheaper way to transact while creating a new revenue stream for the state. The group behind it is hoping it can serve as the model for a digitized dollar at the federal level.
Success would be “adoption of a stablecoin … that’s transparent, that is fully backed by our short-term Treasurys [and] that’s dollar dependent,” Wyoming Governor Mark Gordon told CNBC at the Wyoming Blockchain Symposium in Jackson Hole. “One of the big things for me is to be able to bring back onshore a lot of our debt, because if it’s bought by treasuries and supported by Treasurys, it will help to stabilize that market to a degree.”
“It is clear to me is that digital assets are going to have a future,” Gordon said. “The United States has to address this issue. Washington’s being a little bit stodgy, which is why Wyoming, being a nimble and entrepreneurial state, can make a difference.”
The Cowboy State isn’t new to pushing the boundaries of business law. In 1977, it created the LLC and it has passed more than 30 pieces of crypto legislation to create a favorable regulatory environment for businesses and investors since 2018.
Development on the project is ramping at a time when many crypto market participants are wondering what’s next. Making bitcoin ETFs available to U.S. investors in January was a huge feat. It was the result of a more than 10-year effort by the industry, and sent prices to new records this year. But although the market is still bullish, trading has been rangebound for months.
Plus, crypto and its underlying blockchain technology were always intended to be used for more than just price speculation. Consumer payments, in many cases via stablecoins, are widely seen as the killer app for crypto and gateway to mainstream adoption of this technology.
The vision
Wyoming is currently vetting potential partners and vendors with more tech expertise to help build the stable token. It will require an exchange and wallet providers – Coinbase and Kraken, for example, offer both – to purchase and hold the token. The state plans to issue the token to an exchange so the exchange can issue it to the retail user. From there, it should be just another payment method for everyday things, said Flavia Naves, a commissioner at the Wyoming Stable Token Commission.
“When you walk into Cowboy Coffee in Jackson, Wyoming, and you want to buy your latte, there’s going to be their wallet there in Solana that you can use to buy your coffee with the Wyoming token,” she said, describing the vision for the stablecoin.
It also has a public good tilt to it: the commission plans to invest reserves that back each token in circulation into Treasurys and reverse repos, and use the interest made on those investments to fund its public schools.
At the conference, Gordon emphasized the importance of resisting the urge to focus too much on how much money the state can make here and to instead prioritize reserve management.
Keeping parity
Stablecoins are supposed to keep parity with an underlying asset, usually the U.S. dollar, but they can and have deviated from their pegs due to a spike or drop in demand – especially with a lack of liquidity – poor collateralization, regulatory crackdowns or network congestion.
Naves emphasized that there will be a “buffer” in the reserves to account for any potential deviations and full transparency to establish and maintain public trust.
“There will be audits available to the public on how many tokens [are] in circulation [and] how much money is in the bank account backing, so you can always see there is a 1-to-1 [stablecoin-to-dollar ratio],” she said. “This is a public token as well so as with any public service, all the information is available.”
The commission invites the public virtually to its meetings on the stable token and posts the minutes to its website afterward.
“This is fully reserved and part of what we’ve been working out … is to make sure that we can fully back whatever it is we’re going to do,” Gordon said. “Plus the fact that our legislation says that when a person buys a Treasury or a repo, we’re going to have that in evidence, you’re going to be able to see that. So hopefully we can avoid the de begging issues.”
Digitizing the dollar – and beyond
Naves echoed that the Wyoming stable token is in part a response to the reluctance of the Federal Reserve to create a central bank digital currency, or CBDC, at the federal level. According to Atlantic Council, there are more than 30 countries piloting a CBDC, including the digital euro, and 19 of the G20 countries are now in the advanced stages of developing one.
CBDCs have been widely criticized due to concerns around privacy and surveillance on government-run blockchains. But Naves said that wouldn’t apply here since Wyoming plans to use public blockchains, such as Ethereum or Solana, instead of private networks. The group hasn’t specified exactly which networks it’ll use but has said it wants the coin to be available on several different platforms.
If it’s successful, it could go beyond the dollar.
“Down the road, the intent is to utilize the same technology … to enable other elements to turn into tokens and be on blockchains, whether it is commodities such as gold or oil, whether it is real estate, other governmental obligations – those are still to be determined,” Naves said. “But the success of this initial use case, which is digitization of the U.S. dollar, is the one that is going to enable other use cases to proceed.”
Technology
Amazon was questioned by House China committee over ‘dangerous and unwise’ TikTok partnership
Amazon logo on a brick building exterior, San Francisco, California, August 20, 2024.
Smith Collection | Gado | Archive Photos | Getty Images
Amazon representatives met with the House China committee in recent months to discuss lawmaker concerns over the company’s partnership with TikTok, CNBC confirmed.
A spokesperson for the House Select Committee on the Chinese Communist Party confirmed the meeting, which centered on a shopping deal between Amazon and TikTok announced in August. The agreement allows users of TikTok, owned by China’s ByteDance, to link their account with Amazon and make purchases from the site without leaving TikTok.
“The Select Committee conveyed to Amazon that it is dangerous and unwise for Amazon to partner with TikTok given the grave national security threat the app poses,” the spokesperson said. The parties met in September, according to Bloomberg, which first reported the news.
Representatives from Amazon and TikTok did not immediately respond to CNBC’s request for comment.
TikTok’s future viability in the U.S. is uncertain. In April, President Joe Biden signed a law that requires ByteDance to sell TikTok by Jan. 19. If TikTok fails to cut ties with its parent company, app stores and internet hosting services would be prohibited from offering the app.
President-elect Donald Trump could rescue TikTok from a potential U.S. ban. He promised on the campaign trail that he would “save” TikTok, and said in a March interview with CNBC’s “Squawk Box” that “there’s a lot of good and there’s a lot of bad” with the app.
In his first administration, Trump had tried to implement a TikTok ban. He changed his stance around the time he met with billionaire Jeff Yass. The Republican megadonor’s trading firm, Susquehanna International Group, owns a 15% stake in ByteDance, while Yass has a 7% stake in the company, NBC and CNBC reported in March.
— CNBC’s Jonathan Vanian contributed to this report.
Technology
Amazon launches fixed pricing for treatment of conditions such as hair loss. Hims & Hers stock drops 15%
Former U.S. Army intelligence analyst Chelsea Manning says censorship is still “a dominant threat,” advocating for a more decentralized internet to help better protect individuals online.
Her comments come amid ongoing tension linked to online safety rules, with some tech executives recently seeking to push back over content moderation concerns.
Speaking to CNBC’s Karen Tso at the Web Summit tech conference in Lisbon, Portugal, on Wednesday, Manning said that one way to ensure online privacy could be “decentralized identification,” which gives individuals the ability to control their own data.
“Censorship is a dominant threat. I think that it is a question of who’s doing the censoring, and what the purpose is — and also censorship in the 21st century is more about whether or not you’re boosted through like an algorithm, and how the fine-tuning of that seems to work,” Manning said.
“I think that social media and the monopolies of social media have sort of gotten us used to the fact that certain things that drive engagement will be attractive,” she added.
“One of the ways that we can sort of countervail that is to go back to the more decentralized and distribute the internet of the early ’90s, but make that available to more people.”
Nym Technologies Chief Security Officer Chelsea Manning at a press conference held with Nym Technologies CEO Harry Halpin in the Media Village to present NymVPN during the second day of Web Summit on November 13, 2024 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
Asked how tech companies could make money in such a scenario, Manning said there would have to be “a better social contract” put in place to determine how information is shared and accessed.
“One of the things about distributed or decentralized identification is that through encryption you’re able to sort of check the box yourself, instead of having to depend on the company to provide you with a check box or an accept here, you’re making that decision from a technical perspective,” Manning said.
‘No longer secrecy versus transparency’
Manning, who works as a security consultant at Nym Technologies, a company that specializes in online privacy and security, was convicted of espionage and other charges at a court-martial in 2013 for leaking a trove of secret military files to online media publisher WikiLeaks.
She was sentenced to 35 years in prison, but was later released in 2017, when former U.S. President Barack Obama commuted her sentence.
Asked to what extent the environment has changed for whistleblowers today, Manning said, “We’re at an interesting time because information is everywhere. We have more information than ever.”
She added, “Countries and governments no longer seem to invest the same amount of time and effort in hiding information and keeping secrets. What countries seem to be doing now is they seem to be spending more time and energy spreading misinformation and disinformation.”
Manning said the challenge for whistleblowers now is to sort through the information to understand what is verifiable and authentic.
“It’s no longer secrecy versus transparency,” she added.
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