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Private issuers of stablecoins could extend the lifespan of the US dollar by driving demand for the underlying fiat currency.
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Wyoming Governor Mark Gordon recently took the stage at the Wyoming Blockchain Symposium to discuss how the state was embracing blockchain innovation and highlighted plans for a state-issued dollar-pegged stablecoin on track to launch in 2025.
According to Gordon, who is Chairman of the Wyoming Stable Token Commission, the state is currently working on backing the stablecoin tokens through US Treasury bills and repurchase agreements. It will then reach out to exchange partners for listing sometime in Q1 2025.
A collapsing centralized system based on money printing
Gordon framed the conversation around government overreach in the form of bailouts following the 2007-2008 financial crisis caused by mortgage-backed securities and the issuance of high-risk debt instruments by institutions:
“There was a time before 2008 when capitalism was really important and that meant failure could happen. Somewhere around the 2008 time frame, we made a decision that too big to fail is something that the government was going to stand behind.”
The Wyoming governor continued by explaining that this “too big to fail” approach is contrary to the dominant ethos in Wyoming, which sees risk as a prerequisite for real growth. Gordon then stressed the importance of a “first mover” advantage and how Wyoming’s proactive stance on digital asset regulations primes the state to capture the growth from digital assets.
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This brought the pro-crypto governor to the topic of the Federal Reserve banking system, which he characterized as a “drag on innovation,” pointing out the failed history of the previous two central banks in the United States under the Madison and Jackson administrations.
Potential challenges to a state-issued dollar stablecoin
Wyoming established the Stable Token Commission in July 2023, though the stablecoin initiative was first proposed in a February 2022 bill. When the bill was introduced, Governor Gordon vetoed it, arguing that there was not enough information or a solid business plan in place to push through the proposal.
The proposal also sparked a debate regarding central bank competition and a potential conflict between the state-issued dollar tokens and the Federal Reserve Bank. Industry executives like Brent Xu, CEO of Umee, predicted that private stablecoin issuers will come into conflict with the Fed. Conversely, Wyoming Senator Chris Rothfuss argued that a state-issued, dollar-pegged token would not compete with the central bank, which issues the underlying assets the state-issued digital token would represent.
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This article first appeared at Cointelegraph.com News
