“`html

The Northern Mariana Islands, a U.S. territory in the Pacific, has officially passed legislation enabling the issuance of a government-backed stablecoin on the island of Tinian. The move is part of a broader strategy to boost the local economy and modernize financial operations within the territory.

Legislative Approval for the Marianas US Dollar (MUSD)

On May 15, lawmakers in the Northern Mariana Islands House voted 14-2 to override Governor Arnold Palacios’ veto of the bill, following a May 9 decision by the Senate, which overturned the veto with a 7-1 majority. Initially, the bill had passed unanimously through the Tinian delegation in March and was sent to the governor on March 12.

The legislation authorizes the Municipality of Tinian and Aguiguan to issue the “Tinian Stable Token,” formally called the Marianas US Dollar (MUSD). This stablecoin will be backed by U.S. dollars and Treasury bills held in reserve by the local treasury, ensuring its stability and reliability.

Economic Revitalization Through Blockchain Technology

The rollout of MUSD is tied to a larger economic strategy aimed at revitalizing Tinian’s struggling economy. The legislation also enables Tinian’s local government to issue licenses to internet casinos, integrating blockchain technology into the island’s financial and economic framework.

Marianas Rai Corporation, the exclusive technology provider for the initiative, plans to deploy MUSD on the eCash blockchain, a fork of Bitcoin Cash ABC. This partnership underscores the region’s commitment to leveraging innovative blockchain solutions for economic development.

Potential Impact on Tinian’s Economy

Supporters of the bill believe the initiative could generate significant revenue for Tinian without straining government finances. Vin Armani, co-founder of Marianas Rai Corp., stated that the legislation could “attract billions of dollars of investment and tax revenue” from the cryptocurrency sector.

Another executive at the firm, Clyde Norita, emphasized the importance of diversifying Tinian’s economy, describing the effort as a way to revive a “dying” local economy. He highlighted that the new digital industry could create sustainable income without compromising the island’s culture, environment, or immigration status.

Lawmakers and Critics Weigh In

Republican Representative Patrick San Nicolas, a member of the Tinian delegation, expressed strong support for the legislation, viewing it as a critical step toward reducing dependence on tourism and federal subsidies. “We need this legislation to unlock our potential,” he remarked during floor discussions, emphasizing the importance of self-sustaining revenue.

However, the initiative has faced criticism. Governor Palacios vetoed the bill citing “several legal issues” and concerns over enforcement safeguards. Independent Representative Marissa Flores voiced opposition due to the bill’s ties to online casinos, warning against making decisions driven by desperation or economic pressure. “Every time we’re desperate, it always seems that we come back to casinos,” she argued.

First Government-Backed Stablecoin in the U.S.?

If launched ahead of schedule, MUSD could become the first government-backed stablecoin issued by any U.S. public entity. This would place Tinian ahead of larger-scale efforts, such as Wyoming’s stablecoin initiative, which aims for deployment by July 2025.

Wyoming, which passed the Wyoming Stable Token Act in March 2023, is currently developing its own stablecoin backed by cash and government securities. The state’s Stable Token Commission is conducting cross-chain tests on platforms like Ethereum, Solana, and Avalanche to prepare for the expected launch.

Challenges for Stablecoin Regulation at the Federal Level

While local and state governments are advancing stablecoin initiatives, progress on federal regulations remains stalled. Two major federal bills, the GENIUS Act and the STABLE Act, have lost momentum due to political concerns, including former President Donald Trump’s growing involvement in the cryptocurrency space.

The Northern Mariana Islands’ bold step into the stablecoin market demonstrates the potential for smaller jurisdictions to lead innovation in the digital finance sector. As developments unfold, this initiative could serve as a model for other regions seeking to integrate blockchain technology into their economies.

“`

Post Views: 0