Cryptocurrency is Coming to Wyoming
On July 1, senate bill 38 took effect, Wyoming becomes the first state to allow for the establishment of decentralized autonomous organization (DAO).
This led to the American CryptoFed to become the first DAO in the state, which plans to allow people to use the company's cryptocurrency, Ducats, instead of US dollars to purchase products.
Representative Jared Olsen, of House District 11, said the law allows for a limited liability company (LLC) to be established with bylaws implemented by an algorithm, rather than needing a human to be present.
Olsen said the law requires DAOs to have an office or representative in Wyoming, a measure to help keep the DAOs in the state, but that it could still run into similar issues LLCs can have of having one person in the state, but the rest of the company somewhere else.
Marian Orr, CEO of American CryptoFed, said her company will be good for cities because it will help to eliminate some fees.
"Having been mayor, when someone comes in for a building permit, we typically pay those expensive business permitting fees with a corporate credit card, and so the city is being charged anywhere from 1 to 3% to take that businesses money...so we can save cities, towns and counties money in conducting business...in the future it should be a pretty decent revenue source and should offset any kind of need to increase fees or taxes."
The appeal of using Ducats, Orr said, is that they ensure that there is no inflation or deflation of their currency, compared to what the dollar experiences, which Orr said will be done with another cryptocurrency called Locke.
Each person who owns Locke votes on how the company operates, which, Orr said, will eventually mean her title as CEO will be unnecessary, as the company will be run by everyone who owns Locke, rather than a board of directors or a group of chief officers.
Orr said she is currently the only employee of American CryptoFed, although she is being assisted by around six members of mSHIFT, which American CryptoFed is a subsidiary of.
Scott Moeller, CEO of mSHIFT, said he feels the attention they received when they announced what American CryptoFed is doing on July 4 is a good sign that the project will work out.
"I was not expecting the reaction that we got to our press release...we thought there'd maybe be one article, maybe two articles about it, going out fourth of July weekend on a Sunday, and we got hundreds of articles...and it's just not stopping. People were hoping for something like this, the whole world is looking for clarity and how they can succeed and prosper, and that's what we're trying to bring to the world today."
Part of the way American CryptoFed keeps Ducat steady without inflation or deflation is with a mathematical formula that Moeller said has been modelled by their team to ensure it works.
"Right now it's just math, cause there's no way to test it until you bring it out. We seek to bring in additional mathematicians, additional economists who want to test it, vet it, write reports, write papers."
Orr said that while there are still issues that they need to work out regarding their system, they plan on launching their system by the end of the year.
American CryptoFed plans to put Locke on the cryptocurrency market, and will begin using it to back up Ducat once Locke has remained over 10 cents for 30 days.
Senator Chris Rothfuss, of senate district nine, said the law clarifies what companies can do, making them more likely to situate themselves in Wyoming.
"When you're silent in statue, you don't necessarily know which way a court will end up deciding, and that ambiguity leads to concerns, and leads to problems with bringing on capital and bringing on investors. That's exactly what industry looks for, particularly start ups, that they can feel comfortable bringing capital here and not have that capital at risk due to the regulatory structure."
Rothfuss said by bringing in more businesses into the state with DAOs, he hopes to help diversify the where the state gets money, as opposed to relying so heavily on the mineral extraction industry.
"What sectors can we diversify into in a meaningful way that provides economic growth, and jobs and good jobs, and the types of interesting opportunities that can keep Wyoming kids here. It really remains a great opportunity because of that diversification in ideas and economic development."