According to Cointelegraph, Northern Mariana Islands Governor Arnold Palacios vetoed a law allowing the local government of Tinian, a small island in the U.S. Pacific territory, to launch a stablecoin pegged to the U.S. dollar. In a letter dated April 11, Palacios expressed concerns about the bill, citing several legal issues and potential constitutional violations. The law primarily focuses on licensing online casinos, aiming to regulate activities that cannot be confined to Tinian, which has a population of just over 2,000 and heavily relies on tourism.
The bill, introduced by Republican Senator Jude Hofschneider of the Northern Mariana Islands in February, aims to amend local law to allow the issuance of internet-only casino licenses. The bill includes a provision for the Tinian treasurer to issue, manage, and exchange the 'Tinian Stable Token.' This proposal has 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 in his veto, instead focusing on the bill's efforts to regulate an industry that may exceed jurisdictional boundaries. He criticized the measure for lacking strong enforcement mechanisms to prevent illegal gambling activities.
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 has announced plans to launch a state-sponsored stablecoin in July. The proposed stablecoin, named Marianas U.S. Dollar (MUSD), is expected to be fully backed by cash and U.S. Treasury bonds held by the Tinian city treasury. The Tinian administration has chosen Marianas Rai Corporation, a technology services company based in Saipan, to provide the infrastructure for issuing and exchanging MUSD and developing its ecosystem.
MUSD is planned to launch on the eCash blockchain, a network developed from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash. The launch is set to coincide with Google's $1 billion initiative to lay underwater fiber optic cables from the U.S. mainland through Tinian to Japan, enhancing internet connectivity. Despite the setback, the Northern Mariana Islands continue to explore innovative financial solutions and develop infrastructure to boost their economy.
