The governor of the Northern Mariana Islands, a small Pacific US territory just north of Guam, has vetoed a pivotal piece of legislation that would have enabled the launch of a fully backed US dollar-pegged stablecoin by Tinian, one of the territory’s local governments. In a letter dated April 11, Governor Arnold Palacios expressed concerns regarding the bill, citing legal issues that could potentially render it unconstitutional.
In his letter, Palacios indicated that the bill, which primarily focused on issuing licenses to internet casinos, was attempting to regulate an industry that lacked clear jurisdictional boundaries, leading him to deem it problematic. The stablecoin initiative was part of a broader plan, introduced by Republican Senator Jude Hofschneider, to amend local laws in Tinian to allow for internet-only casino licenses, while also permitting the issuance of the proposed ‘Tinian Stable Token’.
Tinian, home to just over 2,000 residents, has a largely tourism-based economy governed by the Municipality of Tinian and Aguiguan. The local legislative assembly had passed the bill unanimously in a vote on March 12, seeing it as a potential economic boost. However, Palacios’ veto raises significant questions about the future of cryptocurrency regulations in the region.
Importantly, the bill’s failure means that Tinian has missed an opportunity to position itself ahead of other states, specifically Wyoming, which is set to launch its own stablecoin potentially by July. The Tinian stablecoin, known as the Marianas US Dollar (MUSD), was slated to be fully backed by cash and US Treasury bills, managed by the Tinian Municipal Treasury. Its infrastructure was to be developed by Marianas Rai Corporation, a tech services firm based in Saipan.
The stablecoin was intended to launch on the eCash blockchain, which evolved from Bitcoin Cash ABC in 2021, and coincided with Google’s announcement of a $1 billion project to enhance internet connectivity through Tinian. This venture represented not only a technological push for the region but also a means to support local tourism and economic development.
As digital currencies evolve, the implications of this veto extend beyond local governance; they highlight the ongoing discussions about regulatory frameworks needed to support innovative financial solutions, while also ensuring robust enforcement against illicit activities. The Northern Mariana Islands will need to navigate these challenges if they wish to remain competitive in the rapidly changing landscape of digital finance.
