Northern Mariana Islands Senate Overrides Governor's Veto on Stablecoin Bill

The Northern Mariana Islands Senate has voted to override Governor Arnold Palacios' veto of a stablecoin bill, paving the way for the Tinian local government to issue licenses to internet casinos and manage a "Tinian Stable Token." The bill, which was vetoed by the governor on April 11, was overridden by a 7-1 vote on May 9. The bill will now proceed to the 20-member Northern Mariana Islands House, where it requires a two-thirds majority vote to become law.

If the House swiftly passes the bill, Tinian could become the first US public entity to issue a stablecoin, potentially beating the state of Wyoming, which aims to issue a stablecoin by July. Tinian, governed by the Municipality of Tinian and Aguiguan, is one of four municipalities in the Commonwealth of the Northern Mariana Islands, a small US territory in the Pacific north of Guam. The island has just over 2,000 residents, and its economy is heavily reliant on tourism.

Governor Palacios cited legal issues and potential unconstitutionality as reasons for his veto, stating that the bill could regulate activities that cannot be clearly restricted to Tinian. Senator Celina Babauta, the sole vote against overriding the veto, expressed concerns about the lack of resources and manpower to enforce the gambling law and police use of the stablecoin. She emphasized the need to comply with federal statutes and explore other economic diversification measures beyond gambling.

Republican Senator Karl King-Nabors, who co-authored the bill, argued that the stablecoin would provide a more stringent and efficient way to oversee online gaming. He highlighted the transparency benefits of tracking the stablecoin through software, which would enhance the oversight capabilities of the Tinian Casino Gaming Control Commission. King-Nabors also emphasized the bill's alignment with much-needed economic diversification measures, as the local economy struggles to recover from the COVID-19 pandemic-induced slump.

Republican Senator for Tinian, Jude Hofschneider, introduced the bill in February, aiming to amend a local Tinian law to allow internet-only casino licenses and launch a fully backed US dollar-pegged stablecoin. The stablecoin, named the Marianas US Dollar (MUSD), will be backed by cash and US Treasury bills held in reserve by the Tinian Municipal Treasury. The Tinian government has chosen Marianas Rai Corporation, based in the Northern Mariana Islands’ capital of Saipan, as the exclusive infrastructure provider to issue and redeem MUSD. MUSD is built on the eCash blockchain, a network that rebranded from Bitcoin Cash ABC in 2021 and is a fork of Bitcoin Cash, a blockchain that split off from Bitcoin in 2017.

Vin Armani, co-founder and technology chief of Marianas Rai Corp., stated that the company is in active discussions with potential partners about launching the token and is poised to act quickly as US Congress is looking to pass stablecoin laws. The stablecoin bill in the US, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, has stalled in Congress due to concerns about President Donald Trump’s crypto ventures. Another stablecoin-regulating bill in the House, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, has also lost Democrat support due to Trump’s crypto tie-ups.