- Tinian has passed a law to issue MUSD, becoming the first US public entity to launch a government-backed stablecoin.
- The stablecoin will be pegged 1:1 with USD and backed by cash and US Treasury bonds, ensuring full collateral.
In a unique move, the Northern Mariana Islands have approved a law allowing Tinian Island to issue a USD-pegged stablecoin.
The initial bill was vetoed by Governor Arnold Palacios due to constitutional reasons and abuse concerns. However, both the House and Senate voted to unanimously overturn this decision.
The law now allows Tinian to introduce the Marianas US Dollar (MUSD), a stablecoin pegged 1:1 with the US Dollar.
This vote not only marks a change in local governance but also positions Tinian as the first US public entity to issue its own stablecoin, potentially ahead of Wyoming's expected launch in July.
Mariana US Dollar Will Run on eCash Blockchain
The Tinian Municipal Treasury will issue and manage a stablecoin called MUSD.
This stablecoin will be fully backed by cash and US Treasury bonds, providing traditional financial assurance for cryptocurrency.
The sole infrastructure partner for this stablecoin will be Mariana Rai Corporation, a local technology company.
Through their recent tweet, eCash announced that the project will use the eCash blockchain, a fork of Bitcoin Cash, promising a low-cost and scalable stablecoin transaction platform.
Source: X
Why This Matters for Cryptocurrency and Stablecoin Adoption
Tinian's move could open up a new precedent.
Successfully governed by US sub-national governments will demonstrate how governments can navigate federal gray areas to experiment with cryptocurrency infrastructure.
These developments mark an important milestone for stablecoins. This proves that public-private partnerships can create safe and local cryptocurrency solutions.
The development also reflects growing interest in blockchain applications to diversify an island economy previously dependent on tourism.
Moreover, Tinian hopes this move will attract online casinos and digital businesses, diversifying an economy long dependent on tourism without direct public spending.
Source: VISA
Testing Ground for Regulation or Future Model?
Despite being ambitious, the project has not escaped criticism. Some warn that relying on gambling revenue without complying with US regulations could raise concerns.
However, full legal backing and reserves in US dollars may help alleviate these concerns.
Whether this becomes a single testing ground or the beginning of a national trend remains unclear, but Tinian has officially made history.
