Stablecoin bill passes in Northern Marianas as House overrides veto

The Pacific US territory of the Northern Mariana Islands has passed a bill allowing its small constituent island of Tinian to launch a stablecoin, overriding an earlier veto by the territory’s governor.

The 20-member Northern Mariana Islands House voted 14-2 to undo Governor Arnold Palacios’ April 11 veto of the bill, which allows the Tinian local government to issue licenses to internet casinos and includes a provision for the Tinian treasurer to issue, manage and redeem a “Tinian Stable Token.” 

The territory’s nine-member Senate had revived the bill on May 9, voting 7-1 in a two-thirds majority to override the veto, which then needed a two-thirds majority in the House to pass.

Originally, a four-member Tinian delegation to the Marianas legislature had unanimously passed the bill to Governor Palacios on March 12.

It may put the Tinian government in the lead to be the first US public entity to issue a stablecoin, which it must do before July if it’s to beat the state of Wyoming government, which is aiming to issue a stablecoin by then.

Tinian has just over 2,000 residents and a largely tourism-based economy. Its local government, the Municipality of Tinian and Aguiguan, is one of four municipalities in the Commonwealth of the Northern Mariana Islands, a US territory in the Pacific Ocean north of Guam.

Governor Palacios said in a letter that he vetoed the bill as it “presents several legal issues and may be unconstitutional,” would regulate an activity that could not “be clearly restricted” to Tinian and that it lacked needed enforcement measures to counter illegal gambling.

The stablecoin is called the Marianas US Dollar (MUSD) and will be backed by cash and US Treasury bills held in reserve by the Tinian Municipal Treasury, according to statements shared with Cointelegraph in March.

The Tinian government chose local tech services firm Marianas Rai Corporation as the exclusive infrastructure provider for MUSD, which will be launched on the eCash blockchain, a network that rebranded from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash, a blockchain forked from Bitcoin.

A Marianas Rai Corp. spokesperson did not comment beyond telling Cointelegraph the company would announce more on MUSD on May 19.

“Bitter pill to swallow”

Before the vote, House lawmakers heard from the public and discussed overturning Governor Palacios’ veto before they voted it through, with independent House floor leader Marissa Flores airing concerns over the bill.

Marianas Rai Corp. co-founder and technology chief Vin Armani had urged lawmakers to undo the veto, saying the bill would “attract billions of dollars of investment and tax revenue” from the crypto industry without the government having to pitch in.

Clyde Norita, a Marianas Rai Corp. director and local legal cannabis mogul, told the House that the local economy was “dying out” and the bill would allow business in the region “without affecting our culture, without affecting our environment, without affecting our immigration status.”

Representative Flores, who voted against the override, said, “Every time we talk about casinos, there’s always some kind of bitter pill to swallow.”

Related: Stablecoin regulation ‘next catalyst’ for crypto industry — Aptos head 

“It is true, we are in dire need of money, but what I don’t like is when we are desperate, and we are now forced to make a decision because we are desperate once again,” she added. “Every time we’re desperate, it always seems that we come back to casinos.”

“I don’t like to be pushed to a corner to make a decision based on fear,” Flores said.

Others were more supportive of the measure, with Republican Representative Patrick San Nicolas, a Tinian delegation member who initially voted on the bill, saying it would help pull the region out of “a deep economic crisis.”

“We need this legislation to unlock our potential,” he added. “This bill does not depend on tourists or federal subsidies — it builds a digital industry generating revenue from a licensed jurisdiction.”

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