Insights from Wyoming's Blockchain Symposium

Wyoming has long been a pioneer in supporting digital assets. The state's Special Purpose Depository Institution (SPDI) charter, introduced in 2019, was designed to accommodate the growing demand for digital asset services, offering a regulated environment without subjecting banks to all traditional banking regulations. Many Wyoming' dignatories and international companies with SPDI licences attended and the contrast between State and Federal regulation in digital assets was stark.

3 pieces of legislation are key in the development of the digital asset ecosystem at the Federal level:

1. The national stablecoin bill, which at best only has a 25% of being enacted in the next 12 months according to several people I spoke with;

2. The Bitcoin Act, which aims to establish a strategic Bitcoin reserve to strengthen America's balance sheet. As the funds at the U.S. Department of the Treasury are primarily to be used for stabilizing currency markets and promoting global trade, this would enshrine digital assets as a systemically important asset class.

3. Shifting regulatory oversight of select digital assets to the CFTC by creating a new commodities classification that falls outside the parameters of the Howey Test. This would facilitate trading and settlement of “ancillary assets” through CFTC-approved centralized exchanges, while the SEC would retain authority over “digital securities,” allowing for innovation while protecting market participants via necessary disclosures. These are all in response to the SEC’s now infamous SAB121 (Staff Accounting Bulletin 121) from March 2022.

A few remaining take aways;

• The Wyoming Stable Token Commission is launching a new public USD stablecoin issued by the State whereby stablecoin interest income will be redistributed to state schools. 

• The growth of a “Eurodollar” stablecoin market is likely. The former regulators I spoke with know the potential size of the opportunity, and that offshore demand for digital USD is driving the market.

• "Short term T-bils is the grease for using USD stablecoins. That's the reason people get into them. We should tokenize Tbills and put them onchain." Jay Clayton, former Chair SEC

• US Senators I spoke with understand that digital money is the next step in the financial system. The race is on to see who wins and where.