Wyoming leading the way in digital assets, and how credit unions can benefit

Wyoming has established itself as one of the most digital asset-forward states in the U.S., laying the legal groundwork to attract digital asset businesses well before most states had even begun considering blockchain legislation. Beginning in 2018, Wyoming passed dozens of digital asset laws that created legal clarity for blockchain and digital assets, including bolstering mining actions for Bitcoin. These include recognizing digital assets as property, allowing the creation of Decentralized Autonomous Organizations (DAOs) as legal business entities, and authorizing a new type of financial institution—Special Purpose Depository Institutions (SPDIs)—that can custody digital assets and operate outside the traditional banking system.

The state also created a regulatory sandbox to encourage fintech innovation and attract businesses seeking a stable, business-friendly environment. The result has been a wave of blockchain and crypto companies setting up operations in Wyoming, including exchanges, custody providers, bitcoin miners, and developers of Web3 platforms. Kraken, one of the first companies to receive an SPDI charter, was a high-profile example. Following a long history of business operation and legal innovation, Wyoming is once again poised to step out as a pioneer in transforming the future of financial services. 

Among the innovations in the state, the Wyoming Stable Token (WYST) is anticipated to be issued in late August. When launched, it will be the first state-issued stable token in the United States. These digital tokens are designed to operate like cash, combining the technological benefits of blockchain with the price stability of a government-backed currency. Stablecoins offer near-instant, low-cost, programmable transactions—ideal for business-to-business (B2B), person-to-person (P2P), and person-to-business (P2B) payments. A test WYST is currently available on Avalanche, Solana, Ethereum, Arbitrum, Base, Optimisim, and Polygon testnets.

In 2023, the Wyoming Stable Token Commission was established with the passage of Senate File 127—Wyoming Stable Token Act.  The Act further authorized the state to issue a fiat-backed fully-reserved token. This was one of the approximately forty pieces of legislation Wyoming has now adopted in the digital asset space.

Since the laws were passed, the Commission has moved at an aggressive pace to establish a Stable Token office, hire staff, adopt regulations, and procure the necessary services to issue a stable token. 

Wyoming’s credit unions are actively engaging with the Commission as the state sees credit unions as a vital partner for WYST moving forward.

The GENIUS Act—short for Guiding and Ensuring National Innovation for U.S. Stablecoins—was authored by Senators Cynthia Lummis (R-WY) and Bill Hagerty (R-TN) to establish a federal regulatory structure for a U.S. stablecoin payments system. Now signed into law, it includes key provisions to ensure that credit unions are recognized and included as eligible participants in the issuance, transaction, and custody of stablecoins, as well as establishing this regulatory baseline for other digital assets. The bill also requires that non-traditional financial providers meet similar BSA/AML requirements as traditional institutions, helping level the compliance playing field.

Blockchain-based transactions are faster, cheaper, more secure, and inherently programmable through smart contracts. The GENIUS Act recognizes the growing role of stablecoins in the payments ecosystem and establishes federal standards for their use, issuance, and oversight. It applies only to payment stablecoins—not speculative ones like Tether (USDT) or BUSD—and explicitly excludes them from SEC and CFTC jurisdiction by clarifying that these tokens are neither securities nor commodities. Additionally, it formalizes that all U.S. based payment stablecoins must be directly “pegged” or valued at 1:1 ratio with U.S. Dollars, U.S. Treasuries, and/or specific direct U.S. dollar backed accounts.

Under the GENIUS Act, financial regulators such as the NCUA and state credit union regulators will oversee stablecoin activity. It empowers credit unions to:

To ensure safety and soundness, all stablecoins must be backed 1:1 by U.S. Dollars, Treasuries, or insured deposits.

The GENIUS Act opens the door for credit unions to enter the digital payments market, offering a new way to attract members and compete for deposits. Issuers may offer stablecoin-based rewards, redemption services, and remittance products. However, as stablecoin adoption grows, reduced interchange revenue could impact credit unions’ bottom lines. That said, blockchain technology in the stablecoin space should reduce opportunities for fraud and improve the ability to track attempts at fraudulent activities.

Credit unions now face both disruption and opportunity—and must position themselves as innovators in the evolving digital financial landscape.