Wyoming isn’t far from becoming the first U.S. state to issue its own stablecoin, moving closer to a potential showdown with Washington over how its dollar-pegged token should comply with certain restrictions signed into law last week after passage of the GENIUS Act. The Cowboy State, which is historically suspicious of the federal government, could push back against requests to seize or freeze funds on-chain, people close to the introduction of the Wyoming Stable Token (WYST) told Decrypt, speaking as individuals. The landmark bill requires financial institutions to issue stablecoins with “procedures to block, freeze, and reject specific or impermissible transactions,” but as a state-issued token, they say some rules may not apply to WYST, including restrictions on offering a yield.
“We are confident that we can issue yield on our stable token,” Wyoming Democratic State Senator Chris Rothfuss, who chairs the state’s Select Committee on Blockchain, Financial Technology, and Digital Innovation Technology, told Decrypt. “We haven’t necessarily decided that we will [enable WYST yield], but there’s a lot of favorability towards it.”The feature won’t be enabled when WYST debuts later this year, but it is being implemented, Rothfuss said, noting that there are still logistical questions that lawmakers are working through. The project’s main goal is to use funds generated to fund Wyoming’s school system.
Rothfuss said that Wyoming lawmakers are considering other elements of the GENIUS Act, a comprehensive framework for regulating stablecoins that’s expected to unlock additional participation, and competition, within the $280 billion industry dominated by Circle and Tether. Although the bill has been portrayed by some spectators as a stamp of approval for the crypto industry’s legitimacy, some lawmakers fear that the legislation could ultimately erode Americans’ financial sovereignty, including Rep. Marjorie Taylor Greene (R-GA).
