The State of Wyoming has officially launched the first state-affiliated stablecoin, the Wyoming Stable Token (WYST), on multiple blockchains.
This is a major advancement, as Wyoming is the first state in the United States to offer a fiat-backed and reserve-created stablecoin.
Wyoming officials disclosed the testing phase during the official fireside chat at the DC Blockchain Summit on March 26. Governor Mark Gordon, who also chairs the Stable Token Commission, noted the stable leadership Wyoming is taking in advocating for the legalization of digital assets. Speaking to Executive Director Anthony Apollo, he confirmed that WYST has been deployed on the Ethereum, Solana, Avalanche, Arbitrum, Optimism, Polygon, and Base testnets using valueless tokens.
This stablecoin follows the legal laws for over-collateralization with cash and the U.S. Treasury funds to meet its mandates. The interest that is generated from such reserves will go to the Wyoming School Foundation Fund, giving the initiative a broader state-level applicability. The Governor of Wyoming stressed Wyoming’s dedication to blockchain transparency and security, pointing out that the stablecoin backed by reserves will be auditable.
Wyoming’s Experiment Enters Critical Testing Phase
LayerZero Labs, the token issuance partner for WYST, is overseeing the technical implementation of WYST by using the Omnichain Fungible Token (OFT) Standard. This architecture allows the issuance of tokens from one chain to live on another chain with ease.
During initial demonstrations, a cross-chain transaction was performed with Ethereum and Avalanche testnets using the Stargate bridge, which operates on LayerZero technology. Simon Baksys, the Vice President of Business Development at LayerZero Labs, explained that the Wyoming dollar onchain is the future of Finance.
WYST’s multichain compatibility, which was to be implemented later in the development stage, has been precociously activated in the state to integrate into the mainnet. These test transactions make it possible to assess the performance of a given system prior to going live.
Wyoming’s Stablecoin Legislative Framework
The Wyoming Stable Token Act was proposed in February of 2022 and laid the foundation for the state-issued stablecoin. The legislation required that the coin be linked to the US dollar and be redeemable for legal tender money. After the law was passed in March 2023, technical experts, accountants, and auditors formed the development team to manage the stablecoin’s generation and issuance.
As the initiative advanced, the Stable Token Commission recruited industry and government leaders to investigate the use of stablecoins. Although Governor Gordon expected it to go live in Q1 2025 when speaking to an audience at the Wyoming Blockchain Symposium in August 2024, the timeline of development has extended beyond the estimates.
The stablecoin will be backed up with the U.S. Treasury Bills and repurchase agreements for financial stability purposes. This can be aligned with the growing interest in stablecoins among players in the corporate world and state institutions. Currently, the asset management firm Fidelity Investments is weighing the possibility of its own stablecoin as part of its digital cash plans.