House Majority Whip Tom Emmer (R-MN) laid into Wyoming’s accelerating plans to issue its own stablecoin Thursday, issuing a rare rebuke of a fellow Republican crypto initiative.
“I respect the vote of the Wyoming people, however, I personally am vehemently against any government issuing a tokenized version of its currency,” Emmer told Decrypt. “At the federal level, this would be considered a central bank digital currency.”
Central bank digital currencies, or CBDCs—digital versions of a state’s fiat currency—have in recent years become a favored boogeyman of Republican politicians. GOP governors and President Donald Trump alike have worked to ban the development of CBDCs in the United States, given their perceived threat to user privacy. Many Republicans have taken to dubbing CBDCs as “Big Brother’s digital dollar.”
That’s because central bank digital currencies, unlike cryptocurrencies like Bitcoin or Ethereum, are managed by a central issuer that could have the ability to freeze funds or otherwise control how these currencies are spent. And while lacking the censorship-resistance of Bitcoin, CBDCs come with all the transparency: Every transaction made with a “digital dollar,” for instance, would be available to the central issuer for scrutiny.
And yet, on Wednesday, Wyoming’s Republican governor, Mark Gordon, announced that his state is planning to issue a cryptocurrency as soon as July: its long-planned stablecoin, WYST.
Those involved with the project insist that the stablecoin, even if it is issued by the Wyoming government, is nothing like a CBDC. Stablecoins are cryptocurrencies generally pegged to the price of the U.S. dollar, which allow users to trade in and out of crypto without exiting digital assets completely. They also serve as dollar equivalents in markets where dollars are restricted.
Anthony Apollo, executive director of Wyoming’s Stable Token Commission, maintained Thursday that even though he too is opposed to the notion of a state-backed CBDC, WYST is an entirely different type of product.
“Wyoming cares significantly about privacy,” Apollo told Decrypt. “We’re going to have rules in place about what we can and can’t collect, how we can treat that data, and how we can act on that data.”
The director added that the exact nature of such policies is still being ironed out internally. Wyoming’s government is also weighing relying on a third party like a centralized crypto exchange to handle data collection for WYST.
One of the chief criticisms levied against government issued tokens, though, is that whatever rules one administration makes about them, could always be changed by future ones.
Apollo went on to argue that unlike CBDCs, which are digitally issued by a central bank the same way cash is created, Wyoming’s stablecoin will be fully backed by reserves like U.S. Treasuries, and so does not pose inflationary risk.
“Wyoming is not a central bank,” Apollo said. “We are not issuing any cash.”
But why is a solidly red state attempting to issue any form of government-backed digital asset?
Backstage at the DC Blockchain Summit on Wednesday, Gov. Mark Gordon and Apollo made the case that a public stablecoin could offer key benefits private issuers—such as Circle, the issuer of USDC—would balk at, including lower fees and flexibility on touchier transactions like firearms purchases. Interest accrued from the token’s Treasury reserves would also fund the state’s school system.
But the token’s rollout has certainly brought with it questions about the role of government in issuing such a product. Apollo said it’s fairly common for him to have to field questions about whether WYST is a CBDC or not at public hearings and even in conversations with state legislators.
The topic is currently front of mind in Wyoming. Just weeks ago, Gordon signed a bill into law prohibiting the development of a CBDC in the state. The bill’s sponsor said a key purpose of the legislation was “to send a clear message to Congress: that Wyoming rejects the idea of essentially controlled digital currency.”
