The State of Wyoming could be the first government to issue its own virtual currency.
Which brings up one very important question: Why?
We are not specialists in stablecoin/cryptocurrency issues. In fact, we certainly don’t understand the mystery and the reasoning behind crypto and the justification for it.
Crypto is reminiscent of the scrip issued by individual banks during the 1800s when the banks didn’t have enough cash. And the recent meltdown of the overall crypto-market seems to follow the pattern of the scrip.
When few people will accept scrip or crypto as payment for goods and services, its value drops precipitously.
Both chambers of the Wyoming Legislature passed Senate File 106, the Wyoming Stable Token Act, but Gov. Mark Gordon vetoed the bill earlier this year.
The bill is currently being revisited and will probably be brought back in the 2023 regular session. One benefit it offers that is different from other crypto is it would not be subject to much fluctuation since it would be linked to stable assets such as cash and U.S. Treasury bills.
Which brings up the same question. Why?
If it is backed by the U.S. dollar, why not just use the U.S. dollar for payments? Even with all of the dollar’s perceived flaws and fluctuations, it is still backed by the United States of America.
Additionally, the offering of a Wyoming virtual currency would put more demands and the need for more safeguards on the Wyoming State Treasurer’s office without any benefits we can see.
As we understand the logic behind the push for a virtual currency, the idea for the state is to sell the stablecoin for U.S. dollars and then put that money in a separate account to harvest interest.
Since the stablecoin is by design stable and will not fluctuate much in value, we don’t see any advantage for someone to purchase the currency.
Despite the recent meltdown in the cryptocurrency market, stable virtual curriences are currently worth about $160 billion.
With one caveat: Crypto is only worth what people will accept it for in exchange for goods and services. Otherwise, crypto is as worthless as the scrip issued by failing banks in the 1800s.
So regarding Wyoming’s push for virtual currency, our question is still, why?