Wyoming’s WYST Set To Be The First State-Issued, Dollar-Pegged Stablecoin In The U.S.

Wyoming has begun testing its USD-backed stablecoin, the Wyoming Stablecoin Token (WYST), across the testnets for Ethereum, Solana, Avalanche, Arbitrum, Optimism, Polygon, and Base blockchains. WSYT could become the first dollar-backed and fully reserved stablecoin issued by a U.S. state. 

Wyoming’s WYST Stablecoin, Powered By LayerZero Protocol, To Be Launched In July

The announcement was made by Wyoming Governor Mark Gordon and Wyoming Stable Token Commission executive director Anthony Apollo on March 26 during a fireside chat at the D.C. Blockchain Summit, where they also discussed the state’s leadership in blockchain regulation and digital asset innovation. Gordon also serves as the chairman of the Stable Token Commission. 

The Commission has partnered with blockchain interoperability protocol LayerZero to issue WYST on its network. Apollo also confirmed that the stablecoin was deployed on the various testnets using valueless coins for initial testing. LayerZero Labs is supporting the technical deployment of WYST through its Omnichain Fungible Token (OFT) Standard. 

The OFT architecture allows for native issuance and bridging across multiple blockchains. Initial testing executed a cross-chain WYST transaction between the Ethereum and Avalanche testnets using Stargate, a third-party token bridge supported by LayerZero. 

The testing phase will continue through the second quarter, with the Commission targeting a public launch in July. 

Wyoming residents and domiciled entities can register as alpha testers through the Commission’s website. It has also published the smart contract addresses for the WYST testnets, enabling public review and third-party integrations during trials. This open-access approach would support developer experimentation and user feedback, ensuring the system’s robustness before launch. 

WYST Will Be Collateralized By Wyoming State’s Cash Reserves And U.S. Treasury Holdings

WYST is designed to comply with statutory requirements that mandate overcollateralization using Wyoming’s cash and U.S. Treasury reserves. Interest generated from these reserves will be deposited into the state’s School Foundation Fund, reinforcing a broader state-level utility for the initiative. 

Apollo outlined that the Commission is advancing its vendor engagement process to establish a complete operational and compliance framework for the stablecoin, which includes implementing a reserves management system, internal controls, and oversight protocols. 

The ED also noted that in the future, WYST holders would be able to transmit dollar-denominated value globally, at any amount, with a significantly lower transaction fee than traditional remittance systems such as ACH or wire transfers.

Speaking at the D.C. Blockchain Summit, Gordon praised the speed and efficiency of the Wyoming government in embracing blockchain technology. He highlighted that the state’s “forward-thinking approach” to blockchain and digital asset legislation has positioned it as a model not just for other states but also for the federal government. 

Wyoming’s Pro-Crypto Track Record

Wyoming, represented by pro-crypto Senator Cynthia Lummis, has been planning to introduce a state-issued stablecoin for years and has a proven track record of embracing innovation in digital assets and blockchain technology. Lummis is also the author of the BITCOIN Act of 2024, which proposes the establishment of a national strategic Bitcoin reserve and directs the federal government to purchase 1 million BTC over 5 years to enhance the United States’ financial standing and monetary security. 

In February 2022, Wyoming state Senators Chris Rothfuss and Tara Nethercott and House Representatives Jared Olsen and Mike Yin introduced the Wyoming Stable Token Act (SF 01016), authorizing the state treasurer to issue a dollar-pegged stablecoin redeemable for fiat held in a state government-managed account. 

The bill, signed into law in March 2023, enables the treasury to consult with its Investment Funds Committee and hire accountants, auditors, consultants, and other technical experts to issue and manage the state’s stablecoin supply. Following SF 01016’s passage, the government of Wyoming began staffing its Stable Token Commission with officers and executives to research and develop the proposed WYST stablecoin. 

Cryptocurrency exchange Kraken became the first crypto business to receive a bank charter license in the state in 2020. The Wyoming Banking Board also approved a charter for Avanti Bank – the first banking institution in the U.S. designed to facilitate transactions between digital assets and the traditional dollar payment system. 

In 2023, Governor Gordon signed a bill preventing the forced disclosure of private keys, ensuring the protection of digital assets owners’ privacy. The state’s Attorney General, Bridget Hill, also intervened in a lawsuit between Custodia Bank and the Federal Reserve, seeking to defend the bank’s framework allowing certain crypto firms to qualify as state-chartered banks. 

U.S. Lawmakers Pass The STABLE Act To Regulate USD-Denominated Stablecoins

Wyoming’s entry into state-level stablecoin issuance comes amid national-level discussions on developing a regulatory framework for digital dollars and stablecoins. Earlier this month, the U.S. House of Representatives updated provisions of the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act to include clearer guidelines in its proposed stablecoin regulatory framework. 

The STABLE Act, introduced in the House on March 26, aims to establish a federal framework for payment stablecoin issuance, mandating that token issuers maintain sufficient reserves and provide regular disclosures, including monthly reserve attestations verified by public accounting firms. The bill also seeks to protect consumers by ensuring that stablecoin issuers adhere to strict operational standards and comply with the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) regulations.