How do state governments in the United States choose public chains for stablecoin issuance?

Author: Zhi Wubuyan

Last night I saw a news report that Wyoming, USA, conducted a public scoring to choose a public chain for its upcoming stablecoin WYST. Ultimately, 11 chains made it to the candidate list, with Aptos and Solana tying for first place with 32 points, followed closely by Sei with 30 points. Ethereum and several L2s only scored 26 points or lower, which may differ significantly from the perceived activity level and coin prices of public chain ecosystems. How was this score determined? I was curious, so I studied it together with GPT.

1/ First, I want to commend the Wyoming state government for its build in public approach. The Wyoming Stable Token Committee, which is behind the stablecoin WYST, was established in March 2023 under the state's Stable Token Act. This committee has a public Notion document that includes project descriptions, meeting calendars and records, scoring criteria results and memos, Q&A, contact information, and lists its own YouTube channel, X account, Warpcast account, and GitHub account, showing more seriousness and transparency than many current projects that lack effort.

Interested parties can directly go to observe.

2/ In Q4 2024, the committee initially selected 28 public chains, first filtering out 14 based on four yes/no questions regarding permissionless access, supply transparency, on-chain analysis, and the ability to freeze. Then, they scored based on 9 indicators (3 points each), including network stability, active user count, TVL, stablecoin market cap, TPS, transaction fees, transaction finality time, block time, and whether registered in Wyoming. Finally, they added or deducted points based on 5 additional advantages (2 points each: privacy, interoperability, smart contracts/programmability, use cases, partners) and 6 additional risks (-2 points each: illegal activities, team misconduct, history of security vulnerabilities, poor network availability, lack of bug bounties, lack of code maintenance).

Ultimately, they recommended 5 Layer 1 main chains: Solana (32 points), Avalanche (26 points), Ethereum (26 points), Stellar (24 points), Sui (26 points), and 4 eligible Layer 2 chains: Arbitrum (26 points), Base (25 points), Optimism (19 points), Polygon (26 points) to be included in the "candidate blockchain" list.

3/ Aptos and SEI were actually newly included in the evaluation in Q1 of this year. In this quarter, the committee updated the evaluation criteria, adding a new yes/no question regarding "vendor support," meaning "the blockchain must have support from committee partner vendors for development, auditing, and infrastructure deployment. This can be undertaken by the foundation, subject to approval."

They updated another criterion: "the chain must be fully indexed and supported by the committee's partner on-chain analysis platforms (such as Chainalysis, TRM Labs)."

Two new scoring points were added to the additional advantages:

• Emerging Market Trends: Whether it supports emerging projects in AI, DePIN, virtual reality, gaming assets, etc.

• Foundation Support: Whether the foundation can support one or all of the following: technical development, WYST liquidity, market promotion.

In this scoring round, Aptos and SEI scored 32 and 30 points respectively, thus being added to the candidate chains.

4/ So how did this score difference arise? I created a comparison chart focusing on key differences around core indicators. Please note that since the new round of scoring did not re-evaluate the previously selected 9 public chains, some of the data here is from the end of 2024 and not the latest.

It can be seen that Ethereum's TVL is dramatically leading, but in terms of TPS, transaction finality time, transaction fees, and block time, this decentralized chain has suffered many disadvantages. It can also be seen that the diversion caused by Layer 2 has resulted in Ethereum's active user count being on par with SEI, significantly lagging behind Aptos and Solana.

But how did Aptos manage to tie with Solana for the highest score? Upon reading, I found that on one hand, Aptos is indeed very balanced, with strong compliance, fast speed, low costs, and relatively stable networks. On the other hand, it is also because the second round of scoring added two scoring points in the additional advantages, while Solana did not re-participate in this round of scoring. If these two points are removed, the actual highest score should still be Solana.

5/ It is worth noting for Ethereum supporters that although Ethereum has always touted itself as the best choice for carrying real assets on-chain, when it comes to government-level technology selection, aspects like permissionless networks are merely a threshold to pass. Network stability only accounts for one of the core indicators; lacking technical barriers and insufficient network availability are risk deduction items. Solana's occasional downtime cost it 1 point each, but the overall impact was minimal. There was no scoring for decentralization; the state government instead placed more emphasis on whether it can freeze assets and whether it has a physical presence in Wyoming. Most core indicators focus on performance, cost, and scale.

Of course, this state-level stablecoin issuance has stated from the beginning that it will adhere to the principles of "multi-chain support and technology neutrality." They will continue to update the rules, collect feedback, and welcome chains that did not make the list to submit applications for evaluation, so theoretically, both the public chains that made the candidate list and those that did not still have opportunities.

6/ In addition to the public chain selection, the state-level stablecoin project in Wyoming is also noteworthy. As the first state in the U.S. to plan to issue a stablecoin, WYST was originally scheduled to launch before July 4, but during the regular meeting at the end of May, this timeline has been postponed to Q3 2025, with a new proposed date of August 20. Subsequent work will also involve public opinion collection on reserve management rules and final approval, establishing a dedicated ledger/accounting chart for the committee, setting up trust accounts and liquidity fund accounts with third-party custodians, and engaging with licensed service providers, including centralized exchanges, payment platforms, digital wallets, and market makers, for the purchase and resale of WYST, among other tasks.

Ultimately, the reserves behind the stablecoin will be managed by Franklin Templeton, with Chainalysis responsible for on-chain analysis, and integration completed in collaboration with LayerZero and Fireblocks. A decentralized verification network and official website will be launched, with the WYST contract deployed to the mainnet before August 20, followed by a public statement at the Wyoming Blockchain Symposium announcing its official release.

In addition to Wyoming, Nebraska has authorized an entity named Telcoin to issue a state-supported stablecoin temporarily called eUSD through its "Financial Innovation Act." An overseas territory of the U.S., Tinian Island in the Northern Mariana Islands, attempted to issue a dollar stablecoin named Marianas US Dollar (MUSD), which was vetoed by the governor in April this year, but the Senate overturned the governor's veto in May.

The scenario of various states and major companies in the U.S. gearing up to issue their own stablecoins easily evokes memories of the Free Banking Era from 1837 to 1866, during which states, cities, private banks, railroads, construction companies, stores, restaurants, churches, and individuals issued approximately 8,000 different currencies by 1860, with a wide variety and lack of unified standards. The accompanying image is a private currency of $1 issued by the Delaware Bridge Company in New Jersey from 1836 to 1841.

7/ Recently, there has been a lot of discussion about the RMB stablecoin, with some large companies eager to try. After the question of whether to have one, the next question may be which chain to run it on. Should a dedicated chain be launched, or should they use large companies' own consortium chains like Ant Chain or JD Chain? Should they connect to commonly used international public chains, or use some domestic public chains like Hashkey Chain, Conflux, etc.? This question poses a new challenge for governments and enterprises in China, the U.S., and other countries worldwide. Wyoming's scoring system and public disclosure may not be perfect, but it serves as a model for future participants. We should expect to see more interesting governance developments in the future.