Crypto regulation in the world: weekly digest #140

USA

Wyoming is set to launch the first state-issued stablecoin in the United States, named the Wyoming Stable Token (WYST), by July 2025. Governor Mark Gordon announced the initiative at the DC Blockchain Summit, emphasizing its potential to lead blockchain innovation and set a precedent for other states.

WYST will be fully backed by U.S. Treasuries, cash, and repurchase agreements, with over-collateralization ensuring reserves exceed token issuance by at least 102%. This aims to guarantee trust and price stability. The token is being tested on multiple blockchains, including Ethereum, Solana, Avalanche, Arbitrum, Optimism, Polygon, and Base. LayerZero, a blockchain interoperability firm, is assisting with its development.

WYST will enable dollar-denominated transactions globally with lower fees compared to traditional systems like ACH or wire transfers. Interest generated from reserves will fund Wyoming’s School Foundation Fund and other public services.

The introduction of WYST marks a significant milestone in U.S. cryptocurrency adoption, as it is the first fiat-backed stablecoin issued by a public entity. Wyoming's leadership in blockchain regulation could inspire other states to explore similar initiatives.

In comparison with USDT and USDC stablecoins, WYST distinguishes itself through its public governance model and focus on societal benefits, while USDC and USDT cater primarily to crypto market participants with varying priorities like compliance or liquidity.

The UK

The UK's Financial Conduct Authority (FCA) is planning to introduce new rules for cryptocurrencies, particularly stablecoins, and implement a comprehensive licensing regime for crypto companies by 2026.

The FCA aims to start authorizing new crypto firms under the new regime by 2026, following extensive consultations and the development of new rules. The new framework will require crypto firms to meet stringent standards, including anti-money laundering (AML) rules and other regulations, to ensure consumer protection and market integrity.

In addition, the FCA plans to draft specific rules for stablecoins early this year, adapting existing regulations to their unique characteristics. The FCA intends to incorporate effective aspects of traditional finance regulations while recognizing the differences in stablecoins.

Companies already registered under AML rules may need additional permissions under the new regime, potentially requiring them to restart the registration process. The FCA's roadmap is part of a broader effort to establish [the UK](https://tokenscope.com/article/crypto_regulation_in_the_united_kingdom] as a global leader in crypto regulation, providing clarity and consistency for firms operating in the sector.

The IMF

The IMF has issued a working paper titled «Could Digital Currencies Lead to the Disappearance of Cash from the Market?» that explores the potential impact of digital currencies on the use of physical cash.

The report examines how the introduction of digital currencies, including central bank digital currencies (CBDCs), could affect the use of cash in the payment system. It highlights that even unsuccessful launches of new digital currencies might disrupt existing payment systems, potentially leading to the elimination of cash.

The study uses a two-sided market model to analyze how merchants and customers respond to new currencies. It shows that the success of a new currency depends on its large-scale adoption. However, even if a new currency fails, it can still disrupt the existing equilibrium, potentially leading to the extinction of cash. In present, cash provides unique benefits such as anonymity, independence from intermediaries, and resilience during disruptions. Its disappearance could have significant adverse consequences, including the loss of privacy and the difficulty of reintroducing it once it has vanished.

The report suggests that regulatory and monetary authorities should consider implementing measures to ensure the continued availability of cash. This is crucial because reintroducing cash after its disappearance could be prohibitively costly and difficult. Overall, the report highlights the potential risks of cash disappearing from the market due to the rise of digital currencies, but resumes, that this could not happen in the nearest future.

News from other countries:

• The U.S. SEC has agreed to dismiss its lawsuits against Kraken, Cumberland, Immutable and Consensys, which were accused of operating as an unregistered securities exchange, broker, dealer, and clearing agency. These actions reflect a shift in the SEC's regulatory approach to the crypto industry, potentially signaling a more favorable environment for digital assets under the current administration.

• In Kazakhstan a proposal was made to establish a new regulatory framework for cryptocurrencies, including the creation of a new regulating body – «crypto bank». This initiative aims to bring digital asset transactions out of the shadows and under state regulation.

We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!