According to Cointelegraph, the governor of the Northern Mariana Islands, Arnold Palacios, has vetoed legislation that would allow the local government of Tinian, a small island in the United States’ Pacific territory, to launch a stablecoin pegged to the US dollar. In a letter dated April 11, Palacios expressed concerns about the bill, citing a number of legal issues and possible unconstitutionality. The law, which focuses primarily on licensing online casinos, is aimed at regulating activities that cannot be limited to Tinian, which has a population of just over 2,000 and is heavily dependent on tourism.
The bill, introduced by Republican Senator Jude Hofschneider of Northern Marianas in February, would amend local law to allow for internet-only casino licenses. The bill includes a provision for the Tinian treasurer to issue, manage, and redeem “Tinian Stable Tokens.” The proposal received unanimous approval from the four-member Tinian delegation to the Marianas legislature on March 12. However, Governor Palacios did not directly address the stablecoin aspect of his veto, instead focusing on the bill’s attempt to regulate an industry that can cross jurisdictional lines. He criticized the measure for lacking strong enforcement mechanisms to prevent illegal gambling operations.
The vetoed bill represents a missed opportunity for Tinian to become the first U.S. government entity to issue a stablecoin, potentially ahead of Wyoming, where Governor Mark Gordon announced plans to launch a state-sponsored stablecoin in July. The proposed stablecoin, called the Marianas United States Dollar (MUSD), is expected to be fully backed by cash and U.S. Treasury bonds held by the Tinian Municipal Treasury. The Tinian government has selected Marianas Rai Corporation, a Saipan-based technology services company, to provide the infrastructure for issuing and redeeming MUSD and developing its ecosystem.
MUSD is scheduled to launch on the eCash blockchain, a network that evolved from Bitcoin Cash ABC and is a fork of Bitcoin Cash, in 2021. The launch is set to coincide with Google’s $1 billion initiative to route a submarine fiber optic cable from the mainland United States through Tinian to Japan, boosting internet connectivity. Despite the setback, the Northern Mariana Islands continue to explore innovative financial solutions and develop infrastructure to boost their economy.
