Wyoming legislators have given the Cowboy State’s new stable token an agenda focused heavily on payments issues.
The state became the first in the U.S. to publicly sell a stablecoin, the Frontier token, beginning on Jan. 7, with $1.5 million in sales through Jan. 13.
Wyoming legislators have worked for several years to place their state at the forefront of digital currencies with multiple crypto-favorable laws. In 2023, lawmakers formed the Wyoming Stable Token Commission to become the first state with its own cryptocurrency, aiming to use income from FRNT to fund public schools.
Beyond education, however, the token faces several other goals as it grows.
One of the biggest is to curb credit card interchange expenses for Wyoming business owners, along with the prospect of lower property tax rates in the future.
Since the token’s public launch this month, state agencies have begun working to add FRNT as a payment option, Anthony Apollo, the commission’s executive director, said last week in an interview.
The card swipe fee – imposed by bank card issuers and ranging up to 5% – “functionally goes away” if payment is with FRNT, which costs only about 0.1 cent per transaction, he told legislators last month at a budget hearing.
Lawmakers haven’t mandated any token payment usage, but won’t need to, given that merchants, who pay the fee, and residents, who might benefit from savings, will warm to the idea of avoiding interchange costs, he said. “Would you prefer to pay a 5% fee, or would you prefer to not pay a fee?” Apollo said in a call. “You don’t need to mandate anything.”
Stablecoins and tokens are expected to be backed one-for-one by fiat currencies like the U.S. dollar, with the goal of reducing their volatility relative to other cryptocurrencies such as Ethereum, Bitcoin and Dogecoin. By state law, FRNT is capitalized at 102% of its holdings as a protective cushion, with its underlying assets held as dollars and short-duration U.S. Treasuries.
The token is worth $1 and operates across seven blockchains.
To help spur usage, the commission has teamed up with Signify Holdings, a New York-based card issuer that operates as Rain, to integrate FRNT into a payment card that can be used with mobile wallets from Apple and Google.
Residents also can reap interchange savings when paying their taxes or other government registration and permit fees, Apollo said. Residents of Converse County, in the eastern part of the state, paid $70,000 in processing fees on $3.4 million in credit card payments in 2024, the county’s treasurer reported to lawmakers.
Wyoming is also exploring paying state contracts and making payments for unclaimed property via the token, Apollo said.
The token could also be a useful asset for payments by non-governmental organizations, states and federal governments in the form of rapid aid to people affected by natural disasters and other emergency situations, Apollo said.
Wyoming officials seek to draw a sharp distinction between their sovereign token and privately issued stablecoins. The latter are governed by for-profit companies, like Circle Internet Group, Tether and PayPal Holdings, and operate under their own rules about reserves and other policies. The Genius Act, passed into law last year, is also expected to provide a federal regulatory framework for stablecoins.
Circle, for example, prohibited firearm purchases with its USDC coin until a policy change two months ago.
In a press release announcing the token’s sales debut, Wyoming touted the new token as offering the digital benefits of a blockchain asset with “public accountability, transparent oversight, and direct alignment with the rule of law.”
One major risk for Wyoming’s stable token project lies in the potential for interest rates to move lower, which would cut the yield from the underlying assets. Apollo said legislators could alter the mix of securities backing the token to allow slightly more risk for higher returns, such as corporate debt and commercial paper lending.
“We’re not investing in startups or Bitcoin anytime soon, but there are small adjustments you can make along the way,” he noted.
Wyoming is exploring the potential for revenue from bundling its token infrastructure of laws, policies, vendors, technology stack and business relationships into “a white label” product with which other governments can deploy their own digital assets more easily than starting from square one, Apollo said.
“There’s a number of different flows where we can really help streamline processes,” he said of the FRNT infrastructure. “Because we’re doing this as a public-good project, that’s all bound by statute and rules, there’s a lot of interest there.”
Wyoming token officials have spoken with about a dozen states and five countries, including Japan and South Korea, that are interested in following the state’s path, Apollo said, declining to reveal any states because the discussions are confidential.
States that expressed interest in the token generally are seeking “transparency, fraud reduction, waste reduction, and [to] streamline the payments process,” Apollo said. One state is exploring ways to use stablecoin to streamline payments to individuals and with the federal government, he said.
