Stablecoin bill passes in Northern Marianas as House overrides veto

The Northern Mariana Islands (CNMI), a US territory, has authorized the issuance of a stablecoin by its constituent island of Tinian, overriding Governor Arnold Palacios’ veto. The Tinian Stable Token, also known as the Marianas US Dollar (MUSD), will be managed by the Tinian Municipal Treasury and backed by cash and US Treasury bills. This decision follows a 14-2 House vote and a 7-1 Senate vote, both achieving the necessary two-thirds majority to override the governor’s veto.

Governor Palacios’ veto cited potential legal and constitutional issues, concerns about jurisdictional limitations regarding regulation of the activity, and a lack of sufficient enforcement measures against illegal gambling. The bill also includes provisions for licensing internet casinos on Tinian.

The MUSD will be launched on the eCash blockchain, a network forked from Bitcoin Cash, with Marianas Rai Corporation serving as the exclusive infrastructure provider. The company plans to release further details on May 19.

This move positions Tinian as a potential frontrunner among US public entities issuing stablecoins, aiming to beat Wyoming’s projected launch by July. The initiative is intended to revitalize Tinian’s tourism-dependent economy, which has been struggling. Proponents, including Marianas Rai Corp. representatives, argue that the stablecoin and internet casino licensing will attract substantial investment and tax revenue, bolstering the local economy without negatively impacting the environment or culture.

However, the bill faced opposition, notably from Representative Marissa Flores, who expressed reservations about the reliance on casinos for economic solutions and the potential for problematic consequences. She highlighted the recurring pattern of resorting to casinos during economic crises. Despite these concerns, the majority of lawmakers supported the bill, viewing it as crucial for addressing Tinian’s severe economic challenges and creating a new digital industry generating revenue within a licensed jurisdiction. The bill’s passage may set a precedent for other US jurisdictions considering similar stablecoin initiatives.