Why Wyoming’s First State Stable Token Could Redefine Stablecoins in America| Anthony Apollo

Transcript

We can't have Wyoming stable tokens that are in the hands of malicious actors. Um, you know, North Korea and the Lazarus group always comes kind of top of mind when they operate this this space. Do you see stable tokens and and government issued stable tokens as a way of kind of, you know, integrating these two more completely? like how do you see the like the competitive or the collaborative dynamic between the US federal government's objectives and Wyoming's state level objectives when it comes to stable coins. >> Welcome back to the rule.

>> This is your home to learn from the biggest guests, the brightest minds at the tip of innovation. >> Our goal is to help spread the collective knowledge of everyone in our community. >> We are breaking crypto out of its echo chamber and taking it to the real world. Anthony, welcome to the show. >> Thanks for having me, guys. Appreciate it. >> It's good to see you. >> Absolutely. Thanks for coming on. >> We're glad that you're pushing the agenda forward. Today is a Today's a big day for Stripe. Stripe has just announced stable coin payments for subscriptions. I think this was a this is a great place to start because stable coins and crypto has been very very difficult to actually create uh subscriptions with because there's no set there's no like recurring payment flow. It's obviously difficult to do

payment reversals. So, this is a big moment for I think Stripe because anyone who's ran a business who's tried to set up recurring payment flows with, you know, blockchain based stable coins, it's very very difficult. Um, so Anthony, I know this is like fresh for you. It just it just uh hit the newswire five minutes ago, but curious to hear your initial take. >> Yeah, and thank you for bringing that up. I have not seen the newswire yet. Like you said, we're we're running hot here in all things stable coin. Uh they're all you said it's a big day. They're all big days at this point. Yeah. But with Stripe, I'd be interested to see if how that's related to their kind of blockchain endeavors um broadly speaking, but but generally it's a great way to get people to use stable coins more like they use dollars today. And to

your point, we'll get I'm sure into my background in a bit, but before I was in this role, I was building out my own uh blockchainbased platforms. And I saw a couple of early attempts at subscription models and it's not easy to do to your point, right? Making sure that there's actually crypto in the wallet to pull and go to wherever it needs to go. But I think as more and more things move on chain, this is fantastic news. >> Yeah, >> I mean a big day as well for for for another reason which is we've we've officially hit $300 billion of outstanding stable coin supply um which is massive. the majority of that being Tether on Ethereum. Um, also USDC on Ethereum and then Salana and a couple

other a couple other platforms. Binance Smart Chain, uh, Plasma even getting up there now. We're well on the road to trillions, guys. I mean, we are we are getting closer than ever. Anthony, what is the what is your perspective on the path from 300 billion to a trillion? What does that look like? And then we'll get into your background. We'll get into what the work that you guys are doing is. Yeah, I think I think we're rapidly accelerating. Of that 300 billion, I think 45 billion of that was all issued within the last 30 days. Uh, and if we look towards the trajectory that, you know, our Treasury Secretary here in the US, Scott Bezant, has us on, which is $3.7 trillion in stable coins by 2030. I think we're well on our way. We're

seeing the acceleration. We're seeing institutional adoption. I think the Genius Act once that's fully promulgated in place by early 2027 that will continue to accelerate things. I think that'll be one of the big boons uh as well as what we've seen is a lot of interest from non-governmental organizations or aid distribution using stable coins and those are some pretty big numbers that will come on chain very soon. >> Anthony, before we go deeper, I'm curious about your background because Wyoming is a very innovative state. Uh there's things coming out both with stable coins but also with Bitcoin strategic reserves. There's all sorts of um adoption and innovation that's coming out of the the state of Wyoming. And as

a public organization, you guys have to follow a little bit of a set of different rules sometimes than private organizations. So I'm just curious, did you start out as a as a crypto guy? Did you start out as a as a politics guy? Generally, what you know, where do you come from? What what's your story and how did you end up here? Well, of of all those things I could have been, the least was a politics guy. I did not expect to be in government, state government, federal government, policy lobbying. That was not my speed. I actually started my career in traditional finance. Um, predominantly working at some of the big banks in the wake of the 2008 financial crisis and the DoddFrank Act that passed subsequent to that, uh, helping them get all their books and records in order once there were higher barriers to hit when it came

to compliance. So working in the big banks and seeing how the sausage gets made and oftentimes how it doesn't with very antiquated systems uh being in that position and learning about Bitcoin and Ethereum at the same time around the fall of 2015 was a pretty big juxtaposition right it was kind of a night and day difference and started getting more and more into the crypto space that way uh until about 2017 when I formally joined consensus the Ethereum incubator that I'm sure your audience is familiar with uh to work on a early attempt at token ized intellectual property called Solarius. We worked on a science fiction franchise and then we had all these mechanics we were designing around payments within that platform for paying for the media that you consume. Governance tokens that

would indicate which parts of the story became canon or parts of the formal story and there'd be votes by the community on that. Um many different and of course NFTs were in there to actually represent the content. But there was a lot of moving parts on that. And again, I'll I'll reiterate this was February of 2018 when we launched that. So at that time, so someone eventually called it terminally early because at that point like all there was was CryptoKitties and that that gked up Ethereum pretty bad at the time until there's a whole community initiative to kind of bring their code base uh make it a little bit more efficient, right? So uh worked on on that uh started the consensus sports vertical within the organization split off in 2018 to work on some of those endeavors myself my own startups uh and brought that forward but but kind of the

longer tale for me is just working on creators rights getting people paid for the content they create removing some of those intermediaries who are you know in opposition to that so along the lines I've worked with Spencer Denwy who is a professional basketball player then on the Brooklyn Nets now on the Charlotte Hornets to do a tokenized debt security, essentially a tokenized bond on Ethereum with stable coin payouts on a monthly basis to the token holders. So that was and that came out right in the midst of the pandemic. That would have been July of 2020. And that didn't get a whole lot of coverage, but that project ran its life cycle as a three-year bond and hit maturity July of 2023 and and did everything it intended to do without fail. So we b built a great program

there. And then subsequent to that I was working on a platform called Rensa which was for digital multimedia distribution. So whether it was a game, comic, movie, song, you could bring that onchain. There was tokens behind it to recognize the creator of that piece of intellectual property to create licenses as a separate set of tokens so someone can buy it and then affectuate the payment in real time to any number of creators. So we would just split your attribution up by wallet address. Smart contract would codify that. You'd send payments. So, uh, all of that has been my background, much more so than politics. But I will note that work did lead me to Wyoming. Robbie, as you mentioned, Wyoming has been working on the legislative framework around cryptocurrency blockchain digital

assets for about a decade now. There's been 80 bills put forward, 50 of them have passed, most of them under our current governor, Mark Gordon. And seeing all that work is what caused me to leave New York and join the ranks here in Wyoming back in 2021. again just as a builder looking to actually use the fintech sandbox the state had created to play around in for some of these novel programs. But that is what uh brought me here. And then I came a fly on the wall for the meetings of the legislature, the select committee on blockchain, stable token commission before I was hired. And when they needed someone with a odd combination of product development experience, blockchain experience, securities law, banking, lived in Cheyenne to start a program, could start a new role the next day, I was ready and

willing. >> Man, it sounds like Wyoming is the new Delaware. I'll tell you what. Well, Andy, I gotta tell you, uh, if you take a look at it, Wyoming was the first state to have the LLC, and Wyoming ran a better marketing campaign. So, I'm here to make sure that we get the first stable coin out the door and then protect it. >> You mean Delaware ran a better marketing campaign. >> Oh, yeah. That's why they're notorious for it. But we Wyoming was the first state to have the LLC. >> Yeah. Yeah. I mean it feels like it feels like that is like a well it feels like this um kind of you know push towards the adoption around FR&T and just that just general stable coin uh I is is a step in the right direction. I mean if you look across the board a lot

of trady players are trying to understand how to best use um you know just general DeFi technologies but when it comes from like a state level it's it's quite different. So let's talk about the some of the background here with regards to FR&T. What was your core motivation to launching this stateisssued stablecoin, the first stable token issued by a US state? Um, why did you guys decide that this was the right move? >> There's there's typically three reasons we point to about why the state got involved with the staple token specifically. And to be clear, some of this predates my work on it, right? The staple token commission existed before I was brought on as the executive director back in 2023. But as I mentioned, the state has a whole framework for digital

assets. And one of the key things a staple token can do is create cohesion between different and potentially disperate initiatives. So, for example, you have the ability in the state of Wyoming to pay your taxes with crypto. Now, you may not want to do that with Bitcoin, but certainly makes sense to do with the stable token, especially if that means you get the process done faster or if you're getting a refund, you get a refund faster. Um, that's one. We have the digital asset registry in the secretary of state's office. So you can prove that you are the owner of something on chain. We have many different uh business entity structures.

The DAO LLC, coming back to the LLC again, right? But we have a DAO LLC statute on the books. We now have as of two years ago the decentralized unincorporated nonprofit association or DUNA, which is a bit less of a mouthful, but that is a model that UNIS swap has voted to adopt that Syndicate is now involved with. So when you have all these different disperate initiatives, you want to move value between them. It makes sense to do it in a way that is digitally native and also in a way that is stable and a stable token is a great way to accommodate that. Second one, and this is probably a little bit bigger, is the revenue diversification for the state. So the state of Wyoming is an oil and gas state. So we're always looking to figure out new ways to bring new

dollars into the state on because oil and gas is a finite resource. probably not in my lifetime or my grandchildren's lifetime, but at some point that is a finite resource that will run out. The stable needs some way to generate revenues. So with the Frontier stable token, which again is fiatbacked and fully reserved to be clear, not a CBDC, will look a lot more like USDC or PYUSD. Then when we get the dollars into purchase those tokens, those dollars get invested into your typically conservative blend of short duration US treasuries and repurchase agreements. So those are interest generating currently around 4%. So when they those dollars come back to the state that is net new revenue for the state and on a quarterly basis those dollars get swept into the

state's school foundation fund. So it's a way to diversify revenue and to pay for schools in the state without having to increase taxpayer burden. And hopefully if the program gets sizable enough it could pay for not only the schools but more than that over time. And the last one that I'll mention is that it's the state's second attempt at a fully reserved financial instrument. So if you've looked at what Wyoming has done in the past, one of the models we created is the special purpose depository institution or SPDI or Speedy. Uh so if if you're familiar with custodia or Caitlyn Long, she had uh that that institution here, that was something that the state put a lot of time and effort into. There's a 770 page examination manual for the SPDIS. When

those models were brought forward, there was a lot of pressure from the prior administration that kind of kept them down. Caitlyn has a long and storied fight with the Federal Reserve, for example, and I'll not say too much more about that because there's a lot of um back and forth on that in DC, but the goal was to create a financial institution that could custody digital assets provided everything was fully reserved and then a little bit more so overcalized. Uh, and the stable token emerge is a second way to get a model like that out so that the users of it, whether it's Wyoming citizens or well beyond, know where their dollars are at any given time. This is not a bank where you put the dollars in and 90% of it is lent out. You can be the custodian of your own dollars.

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Trading on fire. >> Anthony, that was that was a great explanation on on quite a few points. So, I I think there's you actually evoked like two or three questions that I have in mind, but we'll we'll go one at a time. Um, first off, you're right, Caitlyn Long, University of Wyoming graduate, um, has been a Bitcoin advocate since 2012. Um, has has really evangelized the industry. I And generally Wyoming has evangelized the industry. I'm curious where you guys are at now coming from some of the things that you know she she embarked on while she was doing some work there. You've now issued this uh these token management rules as part of the FR&T token. This kicks off a 45day notice uh essentially a comment period where

people can come in and they can comment on the design, the structure uh the mechanism of of the FR&T token. Could you describe where FR&T is now in this comment period? what has been the feedback that you guys have gotten and then after this comment period ends on November 6th, what are the next steps for this stable coin? >> Right. So, a couple things. First, the 10,000 foot level. It's important to note that everything that this commission does is done in public. This is probably a good time to throw out the what I say is my opinion. I do not represent the commission. The commission is there's seven commissioners includes the governor, state auditor, state treasurer and the determinations of the commission are theirs. I am but their humble emissary as the executive

director. Right. Um but everything we do is public. The determinations are made in public forum at public meetings by majority vote. Every one of our meetings has a period for public comment. The rules that we put forth that will govern how the agency operates do have these public comment periods of 45 days to get that public input. Uh right now in regards to the rule making process, we do have our reserves maget rules are live. Those went through back at the end of July and with the token magic rules like you said those are up for public comment until November 6. We do have emergency rules in place that will kind of bring us if we need to get out the gate first and have those in place we can rely on those. That's gone through the commission again public forum to a certain extent and that you can provide

public comment on it. But in terms of the broader uh kind of public comment period, the not the public notice and comment period, uh again, we haven't we have a couple of weeks on that. Uh there's no hurdles there and getting us out the door before that gets done because we already have the emergency rules in place. Um but we will always want to hear out what the public has to think about where we are, what we've drafted, how it conforms with industry, how it conforms with other statute in the state. Um, we do present all commentary when that November 6th period hits and and we have that deadline. We will meet in a public forum to discuss it and address it. If we need to make changes, there's difference between

non-substantive and substantive changes. Non-substantive, you can make a couple edits and bring things forward, which is what we did with the reserves management rules. You know, someone found a typo, right? Could just strike that and go keep going. If there's substantive feedback, you know, there's always a potential we have to return back to the drawing board, but that just means at the end of the day, we have a stronger deliverable when we get done with the process. Um, in terms of where we are with the token right now, so we did announce the technical launch on August 19th at the Wyoming blockchain symposium. We've launched front across seven different interoperable blockchains through our partnership with both layer zero and Fireblocks. So that is functional, stress tested. Those tokens were put out. All of our

functions were tested on the respective mainetss and then we clawed those tokens back. Uh we since then have now formalized a relationship with custodians to allow us to educate the dollars behind the tokens. That is now functionally live and we are testing that as well to make sure that we have an understanding of the timeline for getting dollars into the account so that we can actually mint the tokens, getting dollars out of the account for redemptions to a user or back to our agency as that recognized revenue. So there's still a little bit more testing going on and then we're also of course wiring up the exchanges and some relationships behind the scenes. These actually be made publicly available. Uh you've likely seen that we've talked about working with Kraken as an exchange

that would have the tokens on Salana. We have the Rain card essentially a smart card that allows you to spend stable tokens anywhere you'd be able to to tap your Visa card provided you're fully loaded. That gets us into 150 million terminals worldwide. That gets us on Apple Pay and Google Pay out the door. So those are all relationships that are again will be live in the very near future. >> Is the idea that Wyoming citizens will be incentivized to use this as a form of payment because this uh reinvests into their schooling and educational systems.

And it it's almost a form of cash back essentially, but it's more directed uh right back to uh something that you know they they're ultimately benefiting from. >> Yeah. So incentives is a good question, right? Because we're a taxpayer funded agency and one of the things that I'll note here is that when dollars start coming back, we actually first owe those dollars back to the state's general fund. So we are at a minimum like a break even net zero agency, right? So that's part of it. But if we were to have incentive models where, you know, we're getting discounts on the token, well, that breaks statute. If we're putting dollars forward to get the token into circulation locally, um there's certain discussion to be had about what

that really represents, which is to say that could be using taxpayer money to go give other people a benefit. So, typically we can't really go down that route. Um the hope on our side is we could work closely with some of the foundations for the respective chains that we're launching on to get these programs off the ground from an incentive perspective. Those would be more at the chain level than the local level. But I do want to be specific. The Wyoming stable token is not limited to the state of Wyoming. Uh it's meant to be domestic. It's meant to be international. It's meant to be used on DeFi. And that's one of the reasons why we did call kind of the first version of a Wyoming stable token the frontier stable token to make sure people understood that it's wherever you're going it's going to be there. Uh the

term Wyoming stable token we still use somewhat interchangeably, but my perspective, again, personal opinion at this point is that the term Wyoming stable token will likely be used to define a different token that we may issue, let's say, on behalf of a different state that uses our statute, our rules, our policies and procedures, our tech stack. You know, we've spent years building all of this. Does it, you know, there's other states that have interest now, other municipalities, other nations. Does it make sense for them to go and spend years and dollars of taxpayer money building it all themselves or to work with us to get it out the door?

>> Yeah. You know, when it comes to the like the core purpose from the stable coin perspective from the federal government, I think we there's a lot of kind of chatter around this being a, you know, a extension of the US dollar's hedgeimonyy, you know, worldwide, right? the ability to get USD into Turkey, Syria, Argentina, uh you know, at large across these different jurisdictions. This provides like a way for us to kind of give people access to a store of value that they wouldn't previously have had um you know, within the US dollar.

when when it comes to like aligning FR&T with like the broader goals of the US government and you know Tether or USDC like how do you see the like the competitive or the collaborative dynamic between the US federal government's objectives and Wyoming's state level objectives when it comes to stable coins? >> Well, I think I think it's much more collaborative than it is competitive. So just to circle off on the circle and tether part first. You know the goal here is now for us to compete with private industry right tether and circle have massive distribution networks massive market effects already as is. Um if they continue to work with private businesses that's great. I'm I'm a user of USDC. So certainly familiar with the

product and it's it's a great product that's been developed. We've gotten a lot of interest more from public sector on our side because we are a public good. Again, we talked about the dollars going back to the state. uh when we talk about that with different organizations, there's a lot more connective tissue between us and other public entities or NOS's that want to do a distribution with a program that is again a public good rather than let's say a tether which you know there's obviously some questions about the audit there and with circle which is now a a public company right they went through the IPO process which means definitionally they're they're ultimately responsible to their shareholders not the end users of the token you know or others who are kind of in

that mix. So we've got a very different remitt and I think that's that's espoused a lot of interest in what we've built again with a focus from the public sector. I think we if this pie really grows $3.7 trillion there's going to be a lot of new entrance. We're not trying to take 10% of Tether's business. We're not trying to take 5% of Circle's business. We want to have, you know, a large stake in in what the public is doing um with their stable coins that could hopefully, you know, create much much more effectiveness, efficiencies, and and low fees within the within the confines of state government.

>> Yeah. >> Going back to the question about the broader US dollar hijgemony, I am I am personally a believer in that position that stable coins are good for the US dollar. Um, we've certainly had a couple of conversations with federal agencies, again, super high level, just trying to figure out what we're doing, who've identified very much the same thing. One of the benefits of doing this issuance as the state of Wyoming is that we are doing it as a sovereign entity. So, we're not doing this as a Wyoming bank, a Wyoming trust, or a stateowned bank or a stateowned trust. Those are all different models. Wyoming state doing the issuance itself, which means that other jurisdictions, whether it's the EU and Nika or the JFSA, they can't necessarily tell us what to do. Now, they can certainly govern the exchanges that tokens are listed on, and we would

need perhaps to conform to that or work with issuers there. Um, but we're certainly trying to play nice, but but generally speaking, we've got a lot of leeway here in that capacity. We would answer to the federal government. Obviously, the Genius Act has passed. It is not our perspective that we are subservient to the Genius Act. If you look at how the Genius Act defines their issuers of stable coins or payment stable coins, the permitted payment stable coin issuers, PPSI, that's defined under the term of a person. So a person is a bank, a trust, a fintech, it's any other business entity. It's not states. States are carved out there. So again, we're not necessarily under the Genius Act either, which comes back to the original question from Robbie about

our rules. That's why it's so important that we create a legislative framework here that has been built out over years that has been built out with public comment because for to a certain perspective, we are a very specialized carveout. Uh and that really creates a lot of efficiency for us to go across border, embrace the global remittance use case, uh embrace aid distribution use cases and many things beyond that. I I'm curious why from your perspective why it's so important to have several st lots of state different stable coins out there and if one state issues like Wyoming will we see multiple states issue are we going to have 50 different stable coins for 50 different states in addition to you know the the

dozens if not hundreds of stable coins from privately issued companies why is it important to have lots of different stable coins from your perspective Well, I think we talk about lots of stable coins. We are at an interesting inflection point where a lot of organizations were announcing their stable coins ahead of the Genius Act passing and the Genius Act passed and there's certain prohibitions in there like you there's a prohibition in non-financial companies issuing stable coins, right? And that comes in the back of Walmart and Amazon saying we're working on this too. Um, now Walmart and Amazon are they've got plenty of money to figure out how they could create a, you know, a financial company that'll eventually get something out there.

They'll call it loyalty points and structure it a little bit differently. I'm I'm sure that they'll figure it out in time. But before there was this explosion of actual issuance when people were talking about doing it. Now there may be some curtailment that may also include the threshold which I believe was originally $10 billion maybe $50 billion in the final version of the Genius Act where if you're under that threshold you can be under a state charter regulated at the state level. You go past that charter and ass management then you have to be under the OC at the national level. So there's different carveouts that can make this more appetizing or less appetizing for different parties. So while I do think we will see many new entrance, I don't think it's going to be hundreds or thousands. I'd also note that once the

treasury rates drop, it will be harder to keep these things afloat. if you're paying if if you're you know running a startup with or even a more robust company with different headcount if you don't have other ways of of perhaps subsisting yourself beyond just getting dollars in from interest to income um and you need to you know pay shareholders out and whatnot that could be a bit more difficult so I don't think there'll be thousands of stable coin issuers but I think there will be perhaps a few dozen um and they may all serve different roles right you know I talked about how we want to espouse the public sector versus the private sector.

Um there may be some that operate in different NGOs and then maybe some that bear interest or not. We we'll see how it all shakes out. But >> that's generally the perspective there. And then when it comes to to other states, >> sorry, go ahead. >> No, I had a question, but please continue. >> Sure. When it comes to other states, I mean, my hope is again personally that they'll come to us and and want to work together because we've built out some of the infrastructure rather than starting it all up themselves. Um, I will say the Bank of North Dakota, I think end of last week did announce that they're going to be working on a stable coin. That's again a very specific infrastructure that is I think the really the only operational state bank.

So they're going to be working with Fiser. Fiser is working with Circle and I think PayPal andor Paxos behind the scenes on that. So that's um another state getting involved, but I don't think 50 states will all have their own. Um it's uh you know, again, Wyoming's been spending years to get this done. Legislation procurement actually engaging the vendors, building the platform out, stress testing it, getting the distribution in place. It would be easier just to collaborate than to compete in some capacity there. So I think we're going to be having some of those conversations in the very near future. The future runs on intelligence, creativity engineering health money productivity, AI promised utopia, but delivered only hype. Blackbox models,

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the the some some you know whether it's federally uh you know doiciled or what have you whether it's private company public we have a a robust money market of states lending money to one another uh borrowing against you know potential receivables just just really enhancing the capital efficiency of intrastate commerce. >> This is just really exciting. It's just there's no question there. It's just just an idea. Well, one one more Robbie I'll throw at you that's that's even perhaps a bit bigger than that is, you know, I was at Korea blockchain week um spent some time in Japan as well recently. You know, there's a lot of interest there about stable coins as well. They're seeing how fast the US is moving. They're seeing how fast the

sector is growing. They want to make sure that they've got their respective legislative frameworks in place and that their respective fiat currencies don't get left behind. And one of the things I've been thinking about is again how to collaborate rather than compete. And you mentioned DeFi applications. I think it'd be quite interesting to have liquidity pools that are potentially even state or nation state sponsored where the frontier stable token could provide the US dollar access on one side of that liquidity pool. A onebased stable coin or a yenbased stable coin can provide it for you know Korea or Japan. And you could have deep liquid forex markets with real-time price discovery that kind of mitigates the arbitrage opportunity which is you know great for finance people not great for the users of the respective fiat

currencies. So creating that transparency I think is what this tech is all about. Uh I think it's a weird way to get there. I wouldn't have predicted this myself uh 10 years ago when I started going down this this rabbit hole. But I do think there's a lot of room for us to collaborate with other nations or other governmental entities regardless of whether it's, you know, public private partnership, whether it's another publicly issued stable coin that looks like our stable token, whether it's a CBDC. I mean, there's a lot of of room there to to kind of figure out the direction. >> Yeah, certainly seems like that's the way Europe is going.

>> It seems like you guys had a pretty decent uh you know, I guess idea of where you wanted to launch this thing. you know, arbitrum, optimism based, polygon avalanche um Ethereum Salana, maybe I think are there seven or maybe I missed one. Um, how did you guys come up with this idea of where you wanted to launch the stable coin? Well, or stable is it stable token to you guys or stable coin? >> So, we use the term stable token. Uh, two reasons. One is we like in our state to think about and I think this will be formalized maybe through legislation if it's not already. Um, we we just everything we do is public, right? So take one step back there. The select committee, which is the branch of the state legislature, the select committee

on blockchain, financial technology, and digital innovation technology. It's a bit of a mouthful. They're the ones who create these laws. One of the things they're looking at is putting together a token taxonomy bill that will address some of the descriptions of these things that we created, you know, almost 10 years ago that maybe some of it's been adopted by industry, some hasn't. maybe want to conform with different pieces of federal legislation as that comes to fruition like the RFIA and the market structure bills. Um so more to come on that but one of the ways the state thinks about coin versus token is coin is something like a cryptocurrency that has an intrinsic value to it while a token is a proxy for a real world asset.

Whether that's a stable token as a proxy for a dollar and cash equivalents, whether that's RWAS, which are now not in not in superly supremely active conversation, but certainly within the lens of the legislature. These are all the things we're we're talking about now. So that that is the stable token, although you know, stable coin is certainly a fairly analogous term. Um that's that's the answer to that that one. >> And then as far as Yeah, the the chain selection. Yeah, I'm curious to understand what the process was because I think you know internal inside the microcosm of crypto is a lot of around like you know the vibes the grants you know you know

>> tech makes sense I >> yeah I could I could assure you this is not grant or vibes based for the state government working on this it's a it's a short question with a bit of detail behind it so >> we have from that select committee a uh encouragement ment to be multi-chain and tech agnostic. Uh when we started this process of chain selection, we did it before we did our procurement process because we said if we're going to go and ask vendors to build this for us, we need to have a decent idea of how it might look because if we're trying to field uh request for proposal on UTXO systems versus accountbased systems versus DTS, it's it's going to be a lot

to handle. And what if the network doesn't work out the way we want it to? Or are we going to embed an entire blockchain select blockchain selection matrix within an existing evaluation matrix for the vendor. So we said let's do the blockchain part first. We created a blockchain selection working group. We took about 30 different chains into scope based on market cap or features like privacy, a whole litany of things. And then we created a series of evaluation criteria. First up were several binary criteria. So you had to have those features if you wanted to move forward into scoring. You had to be public and permissionless as a network but have permission onboarding if we needed that. You needed to be supported

by onchain analytics firms. You need to have freeze and seize capability for interdiction and we'll talk more about that I'm sure in a minute. Um, and there's one I'm missing. But if you were able to get through all of those, and only half were based on feature set, uh, then we would give scoring to your network, right? And there was just some kind of like rope technical criteria, right? What's transaction finality, what's average transaction fee, uh, those, you know, what's TVL, what's stable coin TVL, and then because there is no one perfect metric, right? Daily active addresses is not a perfect metric. That's one of many we're considering. And then even beyond that we created additional benefits as a C criteria as a category which is are you working with other states or governments? Do you have use cases on this network that we could foresee

ourselves doing? Uh and then additional kind of uh constraints or concerns which is you know um has the founding team had any kind of legal difficulties? Has this network been compromised in some way shape or form? So we looked at like 30 different metrics and then created a scoring rubric and we didn't pick one network. We picked essentially was going to be five and we said well we've got a number of layer twos in here who scored well who are on top of Ethereum. So we ended up with nine candidate blockchains if we called them and then we rolled that into our procurement process looking for vendors to build out a stable coin and we said as long as you have infrastructure that can be deployed on one of these nine networks you can submit a bid. So I went through the whole procurement process and my again

original hypothesis was we'd start on one network and then scale from there over time because interoperability was a nice to have in our token issuance RFP. It wasn't a mandatory criteria but when layer zero got involved the bidding process they were the highest scoring respondent and they are natively interoperable. So once we brought them online and said, well, we could start with one, but there's really nothing realistically stopping us from being multi-chain out the gate. That is our remit from the legislature. Let's see how far we can get. That allowed us to launch on seven of our nine chains out the gate. And then we've also done this blockchain selection exercise on a

quarterly refresh based on interest. So some others so I believe sui apttos hideera have come into scope um and then they'll join sui and stellar as existing candidate blockchains that you know were perhaps selected first and then vendors brought on next so we you know stellar was a candidate since day one then we brought on layer zero layer zero has recently announced support for stellar so whichever chains are left as soon as they're adopted by our mix of token issuance partners infrastruure structure with Fireblocks onchain analytics then we will uh go from there and continue to bring them up.

>> Yeah. And so okay so yeah let's let's uh rewind on that uh kind of point that you made w with regards to it almost sound like if you needed to have a chain roll back or something then then that was like a part of the criteria. Maybe you could explain on like I I I forgot the exact terminology but >> freeze and sees >> freeze and sees it sounds like that is something that is kind of it is a part of the traditional uh financial system. It's also a part of like USDC and USDT but not part of things like D or things like these other kind of more like decentralized stable coins. But you're talking about on a chain level which then would require like sequencer uh roll backing or freezing of assets on

the chain. How does like Yeah. H how how did you guys bring that out? >> Not quite the chain level. We had to see examples of stable coins issued on chains that had that feature as part of the smart contract, not the chain itself, right? Um and I would be concerned that not be launching on any chain where any member or validator can start transactions. >> But but at the same time, real world assets means real world concerns. We are a state. >> We can't have Wyoming stable tokens that are in the hands of malicious actors. um you know North Korea and the Lazarus group always comes kind of top of mind when they operate in this this space. So we need to have protections there. We need to have compliance features, you know, onchain analytics, open source intelligence, the ability to do freeze

and seize, which I'll broadly call interdiction, but those are only for our tokens that are issued, right? And beyond that, this because people get a little concerned that a government is able to kind of freeze and seize your tokens. That's always the concern about a CBDC and one that I share. That's why we worked with the legislature to firm up wording uh both from their recommendation to us as well as within our user agreement and token management rules to specify the instances in which we can do interdiction. So for a private issuer, they're pretty much their own judge during execution. And if you look at circles terms of service, there's a whole litany of prohibited transactions and restricted activities. So you can't buy prescription medicine with USDC. You

can't pay your taxes with USDC. I told you a few minutes ago, we want people paying their taxes in Wyoming with a stable token, right? So, we took great care to say that the Wyoming stable tokens can be used for any lawful purpose. We define that. That's federal law in the US. That's Wyoming state law and then your respective jurisdiction, right? So, if you're not using them for, you know, money laundering, then you're going to be okay. Uh and then beyond that, if there is malicious activity detected, we can only act downstream of a valid court order. So we could do a temporary freeze. That's downstream of a t temporary restrictive order. Um temporary court order. Uh or we can do a full freeze and seize, but that is

downstream of a final lawful legal directive. And that is again in our rules and user agreement. So I can't wake up on the wrong side of the bed and say, you know, Andy pissed me off. and they go zap his tokens or you know people call into our public comment period asking about like social credit scores. We can't do any of that. It's either we have a valid legal document saying a crime was committed or it's a permitted action, right? So we've done a lot of work to make sure that we've carved that out appropriately because if we start freezing and seizing people's assets, we get pretty close to constitutional concerns right out the gate.

>> Yeah, absolutely. And this is part of a question I wanted to ask you about the separation between money and state. And I think a lot of people look at the relationship that the Federal Reserve has and how it's been politicized as especially as of as of late. and and they're thinking of Bitcoin as almost this escape hatch where now they can they can kind of exit to this network state uh and and kind of adhere to this monetary policy that they believe is is a little bit more just and legitimate than kind of whatever Jerome Powell, you know, chooses to say that month. H how do you think about separation between money and state? Do do you do you see stable tokens and and governmentissued stable tokens as a way of kind of you

know integrating these two more completely or do you see these as now this this kind of burgeoning industry of of uh this really like interesting and diverse kaleidoscope of of currencies that can all kind of flow and and provide value acrruel back to the US dollar as like one united front. H how generally do you think about this? Yeah. So I think the first thing I touch on is that in terms of separation between money and state, states cannot create their own currency and that's that's the constitution. They they cannot issue their own coin, right? So we're very prescriptive to make sure we note that, you know, we have a digital asset backed by dollars and cash equivalents, right?

So we're not trying to create Yobbucks. Um, we certainly see some some I would call it I guess criticism or at least questioning about, you know, does this bring us back to the wildcat banking days of the 1800s and and I think it's kind of an inane question because you think about that period of time, what was the concern? You know, all these states issuing their own currency, but you didn't know what was backed by and now we're moving to a system where not only will we have monthly attestation reports, we're actually trying to get to real time attestation. So, you always know what's backed by. You're always know what's in circulation. You're going to have all these details. Okay. Well, what if I couldn't swap my my YO books for, you know, the New Hampshire live free or die dollar. Well, if these

things are all interoperable on a blockchain, which is how I hope they should work, again, you're you're removing the concerns that were there in those, you know, days 200 years ago, right? So, so I kind of refute those those arguments. I think we're just creating a digital proxy for dollar denominated assets that can as you mentioned get the dollar into circulation on a global basis in a way that is fairly immediate right we're on high efficiency networks that settle transactions within you know seconds if that um efficient from a cost perspective where the fees are super low we can go crossborder you have all these efficiencies and I think that'll be a

big boom for for the US dollars hegemony. I really do. >> Yeah, totally agree. Um, last question for you and and this has been a fascinating conversation because you guys have a very different way of looking at things and it it and it feels like a very justifiable you guys take your time, you're thoughtful with all the actions that you've taken when it comes to the roll out of this stable token. Um, and and and it's still at the same time all of that even though it's been thoughtful, it's been extremely aggressive and innovative. You guys have done things that no other state in the USA has done. And you know, this just feels like really core to Wyoming's culture. You guys are pi like pioneers in more ways than one. And so I'm just

curious, what is it about Wyoming and Wyoming's people that also just I I think it would be we'd be remiss without mentioning uh Senator Lumis who has been just steadfast in her development of uh infrastructure state legislature that enables this industry. Um she's been a big proponent of the Bitcoin uh strategic reserve as well as the digital asset um you know stockpile. these things seem to be making their way through the federal legislature. And so what I'm just curious, have you had any runins with her? What how has her leadership been able to help steward this project? And generally, what has been the spirit of the people that has kept the the state of Wyoming going?

>> Well, I think the state has always been an innovator, right? I mean, we're we talked about the LLC's earlier, first state to give women the right to vote. Uh it really is something in the water here. Um, I'd also note that this is a state that when it has a perspective, um, there is a bit of a, you know, don't tell me what to do kind of perspective if if it's kind of outside the ethos of the state. And one of those I'll mention again with the come with coming back to digital assets is when the state worked on again this is before my time so apologies if the story a little twisted through that kind of historical lens but the state was working on recognizing certain property rights around digital assets and crypto >> and they had you state had a perspective >> the UCC had a different perspective or

was developing a different perspective and I remember a story of legislators receiving a letter about you know if you do this you know the UCCC is going be out of you be out of conformance and yada yada. Uh legislature said, "Well, we're going to do what we think is right for the state and they did it and now the UCCC has adopted functionally the policies of the state of Wyoming." Yeah. >> Right. So, so that's been a big piece of it. And with Senator Lumis, you know, her leadership really has been a great great throughput, especially the federal level. But I but I will note our chairman is Governor Mark Gordon who has been in that position and signed the the preponderance of bills around crypto and digital assets and blockchain. Um he serves as our chairman and it's I'm hardressed to think we would have

someone better in that seat. I mean if you look at his background not only is he the governor with a lens for the entire state. He was the treasurer before that. So he understands the kind of the economic remmit for the state he's entrepreneur and rancher and at one point he worked as a class B director of the Federal Reserve Bank of Kansas City right around the time of the 2008 financial crisis. So he had a front row seat to the consolidation that moved some power out from the member banks that were intended to, you know, cater to certain jurisdictions they were established in and seeing more of that consolidation at the board of directors in DC. So our whole state really with the leadership and and the work of the select committee, there's been a lot

that's gone into this and and I think only now are people really coming to realize what's been developed over almost a decade in the state of Wyoming as the federal lens turns more towards digital assets. >> Incredible. Anthony Paul, we really appreciate your time and your work pushing the the stable coin agenda or the stable token agenda forward in the state of Wyoming as well as broadly for our our lovely country here America. Um, and just the general outlook that stable coins have put into place in the hearts and minds of those in DC, in New York, and just broadly domestically as well as globally. It's really impacted the perception of of digital assets in a very very positive way and really

brought has really brought the attention of the biggest players in the world on chain and so we couldn't have done it without you man and we appreciate your time today. >> Well thank you for giving me the time of day to uh share it with you and your audience. We appreciate it. >> Absolutely. Keep keep drinking the water anytime. There's >> something in the water. Talk soon. >> Thanks Anthony. Peace out, man. Just