The world of cryptocurrency is no stranger to innovation. From the inception of bitcoin to the rise of the Ethereum network, the space has been a hotbed for groundbreaking ideas that promise to reshape our financial landscape.
That’s not to say that every new development is an improvement.
Case in point: Wyoming’s recent proposal to launch a state stablecoin.
A critical look at Wyoming’s stablecoin proposal
Wyoming, often lauded for its maverick Senator Cynthia Lummis’s progressive stance on blockchain technology, is once again making headlines. And not, I would argue, in a good way…
Here’s the announcement, via “MartyParty” on X:
State of Wyoming is minting their own stable coin. $WYST backed by U.S. Treasuries.
The Wyoming Stable Token Commission (the “Commission” or “STC”) was established in March 2023 with the passage of Senate Enrolled Act 85: Wyoming Stable Token Act, which authorizes the Commission to issue Wyoming Stable Tokens (”WYST”).
Key amendments to the Stable Token Act were passed during the 2024 Budget Session as Senate Enrolled Act 44: Wyoming Stable Token Act – amendments.
$WYST is a proposed virtual currency representative of and redeemable for one (1) United States dollar held in trust by the state of Wyoming as provided by W.S. 40‑31‑106. Stable tokens shall only be issued in exchange for United States dollars.
First off, here in the U.S. states are not allowed to mint their own money. The Constitution explicitly prohibits states from coining money. Article I, Section 10 of the U.S. Constitution (the title of this section is Powers Denied States) is quite clear about this::
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
…that’s pretty clear, right? Now, a handful of states (including Wyoming) have made an end-run around this clause by actually minting gold into a “local, voluntary currency” strictly legal within their own borders. They’re called Goldbacks – and they’re actually pretty cool!
Other than that, though, the Constitution is extremely clear! Wyoming can’t “coin Money,” nor can they “make any Thing… a Tender in Payment of Debts.” It’s pretty clear the Founding Fathers frowned on the idea of a United States that operated on a dozen (or a hundred) mutually-competing local forms of money.
I’m not a lawyer, nor am I a Constitutional scholar – but I can read. Wyoming can’t grant me the title Duke of Wyoming, nor can they coin their own money.
Let’s imagine that minor complication is somehow worked out. Where does that leave us?
The pitfalls of dollar-pegged stablecoins
The primary benefit of cryptocurrencies, in my mind, is simple. They’re a hedge against paper currencies, especially against the inflationary habits of governments and central banks.
Cryptocurrencies are a store of value that isn’t tethered to any government’s fiscal or monetary policies. Every stablecoin pegged to the dollar fails to address this fundamental issue.
When the Federal Reserve prints money, the dollar loses purchasing power. As the dollar loses purchasing power, so does the stablecoin.
To paraphrase Herbert Hoover:
How’d he know???
Furthermore, anyone who decides for any reason they need a dollar-pegged stablecoin is already spoiled with choices. Maybe you’ve heard of one or more of these?
- >Tether (USDT)
- >USD Coin (USDC)
- >Binance USD (BUSD)
- >Dai (DAI)
- >TrueUSD (TUSD)
- >Gemini Dollar (GUSD)
- >…and so on.
I’ll be honest: This whole Wyoming dollar-pegged stablecoin proposal seems like a PR stunt in crypto clothing. This is not innovation!
It’s not even a solution. Fortunately, the crypto investor is spoiled for choices there, too…
Real diversification takes battle-hardened cryptocurrencies
If protecting your retirement savings from dollar devaluation – or exposure to crypto’s massive growth potential – are among your goals, there are far better options.
Established cryptocurrencies like bitcoin and ether have not only survived but thrived over the past decade. These digital assets come with robust ecosystems, active markets, and a proven track record of weathering financial storms.
Often referred to as digital gold, bitcoin has shown remarkable resilience and growth since its inception. Its limited supply and decentralized nature make it an excellent hedge against inflation and currency devaluation. That’s a major reason that a bitcoin IRA is rapidly becoming a must-have asset if you ever want to retire…
Ethereum’s powerful network, on the other hand, offers more than just a store of value. With its smart contract capabilities, it has become the backbone of numerous decentralized applications (dApps) and financial products. Investing in the Ethereum network is not just about holding a cryptocurrency; it’s about being part of a growing technological revolution.
Future-proof your savings
Waiting for government “innovations” to catch up to the future of money is a gamble you don’t need to take. The tools for securing your financial future are already at your fingertips. By diversifying your retirement savings with established cryptocurrencies, you can take advantage of their growth potential while hedging against mainstream financial risks.
At BitIRA, we empower everyday Americans to diversify their retirement savings with digital assets. Our Digital IRA accounts offer a secure and straightforward way to include cryptocurrencies like bitcoin, ether and nearly 20 others into your retirement savings.
Don’t wait for questionable state-backed initiatives to secure your financial future. Open a Digital IRA account today and take control of your retirement savings with proven, battle-hardened cryptocurrencies.
Wyoming’s proposal may capture headlines and spark interest in crypto generally. That’s not a bad thing. But it’s essential to critically evaluate its actual benefits. Any stablecoin pegged to the dollar does little to protect against inflation and dollar devaluation.
I’m not as generous as Caitlin Long, who’s only willing to admit she sees “pros & cons” here:
NEWS–bipartisan group of top #Wyoming legislators proposed a bill for State of Wyoming to issue a #stablecoin, 100% backed by USTreasuries, where the State keeps the float. I see pros & cons (didn’t know it was coming) but❤️that Wyoming continues to explore cool #crypto ideas!🤠 https://t.co/BXbELukUQE
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) February 17, 2022
I mostly see the cons. It IS exciting to see Wyoming’s continuing exploration of crypto ideas. I just wish they’d explored a little farther before deciding to plant their flag…
Instead, we should look towards established cryptocurrencies that have demonstrated resilience and growth over time. Whose intrinsic value is purely market-based! I believe crypto is the future – and I welcome you to join the digital revolution today.
