【FRNT】Wyoming-issued fiat-backed stablecoin / Maintains 102% overcollateralization, with reserve investment income allocated to the state's public fund
Will it become a new source of revenue for local governments?
Good morning.
I’m Mitsui, a web3 researcher.
Today I researched “FRNT”.
What is FRNT?
Legal Framework and Positioning Under State Law
Potential Use Cases (Intra-state Payments, Tax Payments, etc.)
Transition and Outlook
Will it become a new source of revenue for local governments?
TL;DR
FRNT is a fiat-backed stablecoin pegged to the US dollar issued by the State of Wyoming.and is backed by over 100% of its value in U.S. dollar cash and short-term U.S. Treasury bills held in the state’s trust account,1 FRNT = 1 USD redeemable。
The law requires a 2% excess collateral (e.g., $1.02 million in reserves for every $1 million FRNT issued).Full reserve plus over-collateralization is mandated to enhance stability, and reserve investment income isAllocated to state public funds (such as education funding).
Issued and distributed across multiple chains (eventually 7 chains), initially available via Kraken (Solana) and Rain (Avalanche).Based on KYC/AML compliance, it is designed for a wide range of applications including public payments, government expenditures, private settlements, international remittances, and DeFi integration.
What is FRNT?
“FRNT” stands for “Frontier Stable Token,”A fiat-backed stablecoin backed by U.S. dollars issued by the State of Wyomingis.
1 FRNT is designed to be equivalent to 1 U.S. dollar, and all issued FRNTs are backed by over 100% of U.S. dollar cash and short-term U.S. Treasury bills (maturing within one year) held in trust by the state government.
One major feature is that a 2% excess collateral is mandated by law. Wyoming requires holding an amount exceeding 2% of the issuance value, in addition to the standard 1:1 backing, to enhance stability.
For example, when issuing FRNTs worth $1 million, holding trust assets worth $1.02 million provides a buffer against price fluctuations and unexpected market events.
This full reserve system + over-collateralization ensures that, theoretically, the value of FRNT remains stable at $1 USD at all times. Even if the market price deviates, the mechanism guarantees that 1 FRNT can be redeemed (exchanged) for $1 USD.
The underlying assets consist primarily of U.S. dollar cash and short-term U.S. Treasury bills. This asset composition offers exceptional security and liquidity, with stable market prices and the potential for modest interest income.
The FRNT reserve is managed in a state government trust account. Any interest generated from investments in U.S. Treasury securities is allocated to Wyoming’s public funds (such as education funding), not to token holders.
◼️Issuing Chain and Issuance Method
FRNT is designed to be issued and circulated across multiple public blockchains.
The initial plan announced simultaneous deployment across seven major L1 and L2 chains, including Ethereum.
Specifically, it supports multiple chains including Ethereum, Solana, Avalanche, Base, Polygon, Arbitrum, and Optimism, with FRNT tokens issued on each chain. FRNT tokens across these chains are bridged and maintained for compatibility through LayerZero’s Stargate protocol.
However, at the initial release in January 2026, it began circulating on two chains.
FRNT is now available for purchase on the Solana chain via Kraken, and FRNT on the Avalanche chain is offered through the digital asset card service Rain.
The phased launch approach was adopted to ensure security and compliance by initially distributing through trusted intermediaries, followed by a plan to gradually expand support to additional chains. In the future, FRNT is expected to be available across all seven chains mentioned above, functioning as a stablecoin with multi-chain support via LayerZero.
Furthermore, as FRNT is a project involving the state government, compliance systems are also given the utmost importance.
First, KYC and AML are applied from the perspective of user protection and preventing criminal misuse.
As of January 2026, general users must open an account on a U.S.-regulated cryptocurrency exchange such as Kraken and complete KYC procedures to obtain FRNT.
Kraken is an exchange headquartered in Wyoming that has also obtained the state’s Special Purpose Depository Institution (SPDI) license, and complies with obligations such as customer verification and transaction monitoring under the Bank Secrecy Act (BSA). The process of purchasing and redeeming FRNT through this exchange involves verifying the source of funds and excluding sanctioned entities (such as through OFAC list checks), implementing AML/CFT measures equivalent to those in traditional finance.
Legal Framework and Positioning Under State Law
What’s interesting is its legal status.
FRNT is the first state-issued stablecoin in the United States, issued under Wyoming state law. Its enabling legislation is the Wyoming Stable Token Act, enacted in March 2023. This law established the Wyoming Stable Token Commission and set forth the framework for the state to issue and operate stablecoins.
Under the law, FRNT is classified as a “virtual currency,” pegged to the U.S. dollar as legal tender and issued in exchange for it.Special State Debt (Specific Debt)is considered.The key point is that FRNT is neither a state government-issued legal tender nor a deposit, and it is not a general obligation debt guaranteed by the state.That is the point.
Legally, Wyoming explicitly states that it does not provide principal guarantees or insurance regarding the value of FRNTs.
In other words, the assets available for FRNT redemption are limited to those held within the trust account. Even if claims exceed these assets, the state bears no obligation to make additional contributions. Thus, there is no backing by the state’s full faith and credit; the design strictly limits liability to the scope of the trust property.
The law also states that “the state shall not bear fiduciary responsibility to holders of this token.” This indicates a unique legal status: while it shares characteristics with money market funds issued by state governments, it is not subject to federal regulations such as the Investment Company Act.
As this framework is unprecedented, numerous legal issues were also pointed out.
Governor Mark Gordon initially expressed caution toward this project and vetoed the initial 2022 bill, but allowed the amended 2023 bill to become law without signing it.
At the time of enactment, the governor expressed concerns in an open letter that it was unclear whether the state constitution permitted such token issuance or whether there was market demand. However, he also noted the significance of establishing a legal framework to advance innovative endeavors and urged the committee to conduct further review.
The legislation also includes provisions requiring the committee to seek confirmation and guidance from relevant federal agencies such as state treasury departments, securities regulators (SEC), the U.S. Treasury Department (FinCEN, etc.), and the IRS (U.S. tax authority), indicating a cautious approach to ensuring consistency with and applicability under federal law.
As described above, FRNT is a digital asset clearly defined under state law and issued based on a trust fund administered by the state government. However, it is emphasized in the legislation that it constitutes a distinct category separate from fiat currency or state bonds, and carries no explicit guarantee by the state.
This framework represents the first attempt in the United States to issue a digital currency by a public entity, and attention is now focused on its future alignment with federal stablecoin legislation and its potential ripple effects across other states.
◼️Issuer and Operating Entity
The issuer of FRNT is the Wyoming Stable Token Commission (WSTC), established as an official commission within the state government. The commission is headed by the Governor of Wyoming, with Governor Gordon himself serving as its inaugural chair.
Furthermore, the committee members include state financial officers such as the State Comptroller and State Treasurer, along with four additional experts in blockchain and finance. Thus, the committee is composed of high-ranking state officials and private-sector experts, operating as an organization under the direct supervision of the state government.
The committee was allocated $500,000 from the state’s general fund as its initial-year budget to finance the project’s launch (this expenditure is expected to be repaid to the state later from investment earnings).
Operationally, the committee itself establishes issuance and redemption rules and selects partners, while the practical work is carried out through partnerships with private companies.
First, Franklin Templeton, a leading global asset management company, was appointed as the management and investment partner for the reserve assets. The company uses its subsidiary, Fiduciary Trust Company International, as the custodian, safeguarding and managing FRNT’s backing funds in a trust account.
Additionally, Fireblocks has been adopted for the operation of token issuance and distribution infrastructure on the blockchain, providing a secure issuance platform featuring private key management and multi-chain support.
Additionally, a cross-chain communication protocol called LayerZero has been integrated to control the issuance, burning, and bridging of FRNT across multiple chains.
In this way, the state committee is responsible for establishing overall policies and rules, while privately selected companies handle practical operations in their respective specialized fields (asset management and technology implementation).
Regarding the relationship between the committee and the state government, the committee is an official body established under state law and can be considered directly under the authority of the governor. However, as previously stated, the tokens it issues are limited trust obligations, not general obligations of the state.
While the state government lends its credibility to this project (a digital currency bearing the state’s name), it will operate independently and self-sufficiently through the committee and trust fund in legal and fiscal terms.
Operating funds are covered by interest income from reserves, and any profits are transferred to state education funds and similar programs. This structure ensures that all state residents benefit from the proceeds.
The committee also takes the lead in contracting with private companies involved in the project. With the 2024 legal revision, the committee was granted authority to manage procurement procedures itself. This public-private partnership operational framework, combining the state government’s trust with private expertise, is another major feature of the FRNT project.
Potential use cases (intra-state payments, tax payments, etc.)
FRNT is designed for a wide range of use cases.
◼️Public Payments Within the State
First, its use for public payments within the state is drawing attention. Wyoming has a sparse population relative to its vast area, making it a region highly interested in digitizing and streamlining administrative services.
State and county offices currently accept credit card payments for fees, but the associated card processing fees are a financial burden.
For example, according to Converse County’s finance officer, residents incurred approximately $70,000 in fee costs after making $3.4 million worth of payments annually using cards. Electronic payments using FRNT could potentially reduce these fee costs significantly, as the fees would be limited to just a few cents.
The governor also stated, “Leveraging digital assets will enable us to provide residents and businesses with cheaper, faster, and more transparent payment methods.” Plans are under consideration to accept FRNT for future payments such as vehicle registration fees, property taxes, and various other fees.
While some states like Colorado have introduced cryptocurrency payments for state taxes, Wyoming could also reduce administrative costs and improve convenience by directly accepting state taxes and fees through FRNT.
◼️State government expenditures
Next, efforts are also being made to utilize it on the expenditure side of state governments.
In 2025, Wyoming partnered with blockchain company Hashfire to conduct a pilot program using FRNT to make payments to state contractors.
This experiment reports dramatic efficiency gains, automating everything from contract verification to payment approval on a smart contract, reducing the payment processing time to vendors—which previously took 45 days—to just seconds.
For example, it is possible to implement a process where payments to public works contractors are executed instantly using FRNT, and the receiving contractor can immediately convert the FRNT into cash in dollar denominations. This is expected to lead to improved cash flow for small and medium-sized enterprises, reduced administrative processing costs for governments, and overall innovation in government procurement and payment processes.
◼️Use in the private sector
Its use in the private economy is also a major theme, as it can serve as an alternative to cash and cards in everyday commercial transactions and person-to-person money transfers.
For example, if retailers and online shops within the state accept FRNT payments, they can avoid credit card fees and receive payments instantly at low cost. For consumers, the benefit is that payments can be completed instantly from their smartphone wallet without going through a bank account, eliminating the hassle of handling change and cash management.
Especially in tourist-oriented businesses like resorts, digital cash that eliminates the need to handle multiple currencies and is universally understood as 1 FRNT = 1 USD offers significant convenience.
Additionally, since FRNT enables cross-border remittances anywhere with internet access, it can be used for international money transfers and sending funds to overseas students. While traditional bank transfers and international payment networks took days and incurred high costs, FRNT completes transactions in seconds at minimal cost. This makes it potentially useful for state businesses receiving or sending payments from overseas.
◼️DeFi Integration
Finally, its potential applications in the digital asset market and DeFi space should also be noted. Should FRNT achieve sufficient circulation, it could be utilized as a liquidity provider or collateral asset on DEXs and lending platforms, or integrated into other applications as a blockchain-based payment method.
Currently, USDC and USDT fulfill such roles, but scenarios may arise where FRNT, offering greater regulatory reassurance, becomes the preferred choice.
In particular, Wyoming is actively pursuing the integration of tokens and bank deposits through institutions like SPDI Bank. This could lead to direct connections with banking infrastructure, enabling instant conversion of dollars in bank accounts to FRNT for blockchain transfers, which could then be instantly converted back to dollars at the receiving end. This holds significant potential to revolutionize current systems like ACH transfers.
◼️Summary
As described above, FRNT’s envisioned use cases range from streamlining payment and collection operations within state governments to consumer and corporate settlements, and further extend to utilization within a broader digital economy.
State government officials expressed their expectations, stating, “This token will not only become a new source of revenue but also serve as a tool to enhance the economic efficiency of the entire state by enabling cheaper and faster transactions.”
At this stage, however, verification and awareness-raising are still in their early phases, and user education and system development are essential for expanding adoption. Nevertheless, with pilot successes beginning to emerge, the likelihood is growing that a digital payment ecosystem spanning both public and private sectors will form within Wyoming, with FRNT at its core.
Transition and Outlook
To recap, here is a chronological overview of the FRNT project’s history and future plans.
March 2022：The Wyoming State Legislature passed the first bill to create a state-issued stablecoin, but Governor Mark Gordon refused to sign it (requesting a review of concerns). At this point, formal issuance has not occurred.
January 2023：Revised State Bill SF0127, the “Wyoming Stable Token Act,” introduced.
March 2023：Wyoming Stable Token Act EnactedThe governor did not sign the bill, allowing it to become law (legally enacted). Under this law,The Wyoming Stable Token Commission (WSTC) has been established.A goal has been set to issue tokens by the end of 2023. The state government has contributed an initial operating budget of $500,000.
Second half of 2023：The committee appoints specialized personnel,Anthony Apollo appointed as Executive OfficerAppointed (September 2023). Additionally, conducted partner company selection, including Franklin Templeton, and evaluated blockchain technology (analyzing 28 candidate chains). In March 2024, strengthened the committee’s authority regarding investable assets and procurement procedures through legislative amendments (Senate Enrolled Act 44).
2024：System development and testing phase.Experiment to issue FRNT (then provisionally named WYST) on the testnetConducted a smart contract payment pilot with Hashfire. Simultaneously continued discussions with federal authorities and reporting to state legislatures. The issuance target date was delayed from the initial plan, and the public release date was postponed several times.
August 2025：FRNT Mainnet Official LaunchThe committee announced the launch. The governor issued a statement declaring, “Our state has achieved the first public stablecoin in the United States.” At this point,Support for seven blockchains and interoperability via LayerZeroThe details were revealed, and the backing assets were announced as US dollars and US Treasury bonds managed by Franklin Templeton, with a design featuring 2% excess collateral. However, the start of sales and distribution to the general public is said to be “soon,” and preparations are continuing.
Fall 2025：within the stateLimited operational launchThe state contract payment pilot with Hashfire was successful. Additionally, the use of FRNT reserve interest (school fund) and the committee’s additional budget request ($2 million) were discussed in the State Legislature’s Revenue Committee and other venues, with questions raised about revenue projections. The committee allocated $5.8 million in “other fund” money for the 2024-26 fiscal year budget to prepare for full-scale implementation.
January 7, 2026：General sales beginThe Governor of Wyoming and the Commission announced that the FRNT is now available for purchase by private users for the first time.The FRNT trading pair (against USD) has been launched on our partner exchange, Kraken.First, the Solana chain version of FRNT became tradable. Simultaneously, service for the Avalanche version of FRNT via the Rain platform also commenced. The governor commented, “The state has pioneered a new era,” stating that for residents and businesses...To serve as an inexpensive, fast, and transparent means of transaction, with reserve interest serving as a source of state education funding.emphasize. This enablesFRNT is officially available on the market.We have now entered the implementation phase.
Outlook Beyond 2026：The committee is planning further developments even after the initial launch.
SpecificallyWe plan to fully activate the supported chains (making it available on all 7 chains) and have more exchanges and wallets support FRNT.
Additionally, within the state, a trial program for receiving county taxes and various fees via FRNT is underway.The introduction of a system for paying state university tuition fees is also being discussed.
In terms of cooperation with other states, we could explore mutual interoperability with North Dakota’s Roughrider Coin and consider joining an interstate remittance consortium.
Although it has only recently been released, the FRNT Committee has already indicated to the state legislature that the FRNT project is expected to be self-sustaining in the next budget.
Future challenges include building market trust (ensuring sufficient liquidity), maintaining cybersecurity, and conducting education and promotion to expand user adoption. While addressing these challenges, Wyoming’s FRNT project is expected to continue evolving as a groundbreaking initiative in the history of digital currencies in the United States.
Will it become a new source of revenue for local governments?
Finally, we conclude with a summary and analysis.
Wyoming is also pursuing new legal entities for DAOs, making it a very tech-friendly state. This state-backed stablecoin project is also an experimental and interesting initiative.
This release follows a process that began in 2022, involving the clarification of our legal standing, blockchain analysis, and pilot-phase proof-of-concept testing. It is not a move riding the wave of the stablecoin trend over the past year.
Furthermore, the mechanism of 102% overcollateralization and the project itself being operated using the investment returns from the collateral funds, with the surplus utilized as a state public fund, is also highly unique.
This model may become a new source of revenue for local governments.
Budget allocation is essential for government operations. However, by leveraging public trust to issue and implement a stablecoin, residents will actually experience greater efficiency in tax payments and other transactions, while businesses will see reduced transaction fees. Furthermore, since no new taxes are required and state revenues increase, this initiative benefits everyone.
The main concerns remain the outflow of collateral funds and hacking. While achieving 100% security is simply impossible no matter how hard we try, the expertise cultivated by stablecoin operators to date does exist. Therefore, I believe it is possible to implement measures that minimize risk as much as possible through safe operations.
While some regions in Japan already have local currencies in circulation, simply converting these into stablecoins could create new revenue streams and potentially streamline local economies.
We will continue to keep an eye on FRNT’s initiatives.
That concludes our research on “FRNT”!
Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.
About us
🇯🇵🇺🇸🇰🇷🇨🇳🇪🇸 The English version of the web3 newsletter, which is available in 5 languages. Based on the concept of ``Learn more about web3 in 5 minutes a day,'' we deliver research articles five times a week, including explanations of popular web3 trends, project explanations, and introductions to the latest news.
Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.
Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:
Telegram：@mitsui0x
*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.