Northern Mariana Islands Governor Vetoes Stablecoin Legislation

According to Cointelegraph, the governor of the Northern Mariana Islands, Arnold Palacios, has vetoed legislation that would have allowed the local government of Tinian, a small island in the Pacific U.S. territory, to launch a stablecoin pegged to the U.S. dollar. In a letter dated April 11, Palacios expressed concerns over the bill, citing several legal issues and potential unconstitutionality. The legislation primarily focused on issuing licenses for internet casinos, aiming to regulate activities that could not be confined to Tinian, which has a population of just over 2,000 and relies heavily on tourism. The bill, introduced in February by Republican Northern Marianas Senator Jude Hofschneider, sought to amend local laws to permit internet-only casino licenses. It included a provision for the Tinian treasurer to issue, manage, and redeem a "Tinian Stable Token." The proposal received unanimous approval from the four-member Tinian delegation to the Marianas legislature on March 12. However, Governor Palacios did not address the stablecoin aspect directly in his veto, instead focusing on the bill's attempt to regulate an industry that could cross jurisdictional boundaries. He criticized the measure for lacking robust enforcement mechanisms to prevent illegal gaming activities. The vetoed bill represented 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 announced plans for a state-backed stablecoin launch in July. The proposed stablecoin, named the Marianas US Dollar (MUSD), was intended to be fully backed by cash and U.S. Treasury bills held in reserve by the Tinian Municipal Treasury. The Tinian government had selected Marianas Rai Corporation, a tech services firm based in Saipan, to provide the infrastructure for issuing and redeeming MUSD and developing its ecosystem. The MUSD was planned to launch on the eCash blockchain, a network that evolved from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash. The launch was set to coincide with Google's $1 billion initiative to route fiber-optic subsea cables from the mainland U.S. through Tinian to Japan, enhancing internet connectivity. Despite the setback, the Northern Mariana Islands continue to explore innovative financial solutions and infrastructure developments to bolster their economy.