Tinian May Become the First US Jurisdiction to Launch a Government-Backed Stablecoin

The stablecoin bill in the Northern Mariana Islands isn’t dead yet. On May 9, the Senate voted 7–1 to override Governor Arnold Palacios’ veto

A bill to create a stablecoin in the Northern Mariana Islands appears to be getting closer to approval, despite the governor’s veto.

The Senate voted 9-1 on May 9 to overturn Governor Arnold Palacios’ veto of the measure, which will now go to the House of Representatives for a final vote. A two-thirds majority is needed to override the governor’s veto.

The bill would allow the island of Tinian to issue casino licenses and launch its fully-backed stablecoin.

The stablecoin bill, which was introduced in February, proposes the “Marianas US Dollar” (MUSD), a token that will be backed by cash and U.S. Treasuries. The Tinian Municipal Treasury will manage its issuance and redemption through the Marianas Rai Corporation.

Governor Palacios had blocked the bill in April, citing legal issues and possible overreach. But Tinian Senator Karl King-Nabors defended the move, calling it “a transparent way to modernize online gaming.”

Senator Celina Babauta was the sole vote against overriding the governor’s veto. She warned of limited manpower and federal restrictions in monitoring the new technology and institutions.

Babauta questioned the government’s ability to effectively enforce stablecoin policies and maintain oversight of casino activity, given the small size of the legal and administrative teams.

“I believe that we do not have the capacity to take on both at the same time,” she said.

After discussing the pressing need for new revenue streams to aid pandemic recovery, Senator King-Nabors expressed his support for the measure.

“We need new revenue models. We need to be creative in this time,” he said.

The Northern Mariana Islands may be the first to launch a government-issued stablecoin.

Earlier this year, Wyoming passed a bill to allow the state to issue a fully-backed stablecoin, but it will not be launching any digital dollar tokens.

Officials say the new stablecoin token will run on the eCash blockchain, a fork of Bitcoin Cash. It will be backed by U.S. Treasury funds and available for use in casinos and online gaming platforms.

The move will also help the island recover from pandemic losses and attract innovation without harming the environment, backers said.

“This is a way forward,” said King-Nabors, a supporter of the measure.

As U.S. lawmakers debate national crypto regulation and Bitcoin gains more political backing, the Northern Mariana Islands could be leading the charge from the edge of the Pacific.