Northern Mariana Islands joins Wyoming in passing government-backed stablecoin bill

A second bill that makes way for the launch of a government-backed stablecoin was approved in the Northern Mariana Islands, joining Wyoming as the only two US jurisdictions actively pursuing public-sector digital currencies. The bill, approved on May 15, sets the stage for the launch of the Marianas US Dollar (MUSD). What is MUSD? MUSD, short for the Marianas US Dollar, is a government-backed stablecoin set to be issued by the Municipality of Tinian and Aguiguan, a local government unit within the Northern Mariana Islands. It’s designed to be fully backed by US dollars and short-term Treasury bills, which would be held in a reserve maintained by the Tinian Municipal Treasury. The stablecoin will be issued, managed, and redeemed by the local government, effectively making it a digital representation of US fiat. According to details in the bill, MUSD will operate on the eCash blockchain, a network that originated as a fork of Bitcoin Cash and was formerly known as Bitcoin Cash ABC. In practical terms, MUSD is intended to function as a dollar-pegged token that residents and businesses can use for digital transactions within a regulated local framework. Supporters of the legislation believe the launch would boost economic activity on the island, particularly through sectors like online gaming, which the bill also authorises under a new licensing regime. Marianas Rai Corporation, a locally based technology firm, has been selected as the exclusive infrastructure provider for the stablecoin rollout. While technical specifics remain limited, the firm has confirmed it will manage the stablecoin’s issuance and tracking via blockchain smart contracts, offering transparency and auditability. Unlike commercial stablecoins issued by private companies, MUSD is positioned as a fully public-sector initiative. The Tinian government will retain control of the reserves, token supply, and regulatory oversight. Legal hurdles along the way Since its introduction, the legislation has had a rocky journey through the Islands’ legislature, with progress stalling after Governor Arnold Palacios vetoed the bill in April. Palacios raised concerns over what he called “several legal issues,” arguing the proposal lacked adequate enforcement provisions and could create regulatory gaps beyond Tinian’s jurisdiction. However, the bill was revived following pressure from lawmakers and public testimony in support of the measure. The Tinian delegation led the charge, pushing for an override that would allow the legislation to move forward despite the governor’s objections. On May 9, the territory’s Senate voted 7-1 to overturn the veto, and the House followed suit on May 15 with a 14-2 vote, officially clearing the way for the MUSD initiative to proceed. Northern Mariana Islands joins Wyoming, which has been working on its own government-backed stablecoin since 2023 under the Wyoming Stable Token Act. The state created a dedicated Stable Token Commission to oversee the rollout of the Wyoming Stable Token (WYST), which is backed by a combination of cash, US Treasuries, and repurchase agreements. Since then, Wyoming has been quietly building the technical foundations for WYST. The commission has partnered with LayerZero for cross-chain functionality and has tested the token across multiple blockchains, including Ethereum, Solana, Avalanche, Arbitrum, and Polygon. The post Northern Mariana Islands joins Wyoming in passing government-backed stablecoin bill appeared first on Invezz

Source: Invezz