Wyoming has always boasted pioneers. We’re called the Equality State because we broke so many barriers for women. We also lead in the energy sector, as both the country’s biggest net energy supplier, and the creator of new, cleaner means of energy production.
Today, I’m launching the Financial Innovation Caucus in the United States Senate to cement our pioneering leadership in another area: financial technology, digital assets, and our economic future.
Technology has changed so much of our lives, mostly for the better. In the world of finance, technology has the potential to bring Wyoming families and business owners greater wealth and investment opportunities through a faster, safer financial system.
It starts with something called a “digital asset.” A digital asset is like any asset you might own (a house, a car, or share of stock), but consists of a computer code-based representation of that asset. Essentially you own computer code. This might sound farfetched, but if you think about it, the website Google.com is nothing more than computer code, and we would all agree that Google.com has substantial value.
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Digital assets hold value because of a technology called “blockchain.” Blockchains are a secure way of recording actions and transactions. Blockchain records are hacker-proof because they created a lot of copies of the transaction record, so if someone tampers with one copy, the other copies will immediately show it.
Blockchain technology can be used for a lot of things, but one example in Wyoming is supply chain management. Wyoming ranchers today are using a blockchain for cattle that allows consumers to track the steak they are eating from “conception to consumption.” You can know what steer your filet came from, whose ranch, what butcher, and it brings ranchers higher prices.
In the future, this technology can also help eliminate the time it takes to make money transfers, or to clear your paycheck at the bank. It can update the “plumbing” of our financial system.
This brings us to Wyoming. Starting in 2018, Wyoming enacted a series of laws that are turning our state into the ideal place to set up digital asset and blockchain businesses. We grant property rights to digital asset owners. We are empowering entrepreneurs to try new things with the assurance that their work is protected. And we have authorized the creation of a new kind of bank specifically for digital assets that integrates them into the financial system safely.
As a result of these laws, we started something: a movement to bring America’s financial system into the 21st Century. A dozen other states and the federal government have copied our laws.
South Dakota did something similar in the 1980s. Credit cards were brand new, and South Dakota passed a series of laws to attract credit card companies to the state. Because they were first, many credit card companies to this day house themselves in South Dakota, and the state holds over $3 trillion in bank assets – more than any other state in the country. More importantly, there are tens of thousands of high paying financial industry jobs in South Dakota.
Delaware did something similar, but for corporations. Today, more than 60 percent of Fortune 500 companies are incorporated in Delaware. These corporations provide billions in tax revenue to fund Delaware’s schools, roads, and hospitals.
I want Wyoming to be the next financial success story. But this is about more than just our state. For much of the last decade, China has spent enormous amounts of time and money on researching blockchain technology, digital assets, and more. Today, they have introduced a new form of digital money in several cities, and they want to do this internationally. If they out-innovate us, that could shift the global financial system to China and away from the United States.
A shift like that would undermine the U.S. dollar as the leading global currency, and would mean that the low interest rate we currently pay on our $28 trillion national debt would increase – putting our country in a very difficult financial situation.
Clearly, we need to bring our financial system into the 21st Century. That’s why we need the Financial Innovation Caucus. This caucus will educate senators of both parties about digital assets, blockchain, faster payments, and how the United States can surpass countries like China.
This will take a lot of work, and the caucus is just the starting point. But it is a central part of how I am working to ensure that what we pioneered in Wyoming brings our state the same success that Delaware and South Dakota experienced from their efforts. And at the same time, it will help the United States lead in the 21st Century, and for generations to come.
Cynthia Lummis is the junior senator from Wyoming in the U.S. Senate.