Wyoming Taps Chainlink to Verify Reserves for State-Issued Stablecoin

Wyoming will use Chainlink for the reserve verification system backing its state-issued stablecoin.

The Wyoming Stable Token Commission recently adopted Chainlink’s Proof of Reserve system as the on-chain asset verification infrastructure for Frontier Stable Token, or FRNT, The Block reported on September 2.

The Network Firm will handle external verification of FRNT’s reserve assets. The accounting firm will verify both the actual reserves and the amount of FRNT in circulation under standards set by the American Institute of Certified Public Accountants.

Chainlink will transfer the verified reserve data onto the blockchain. Wyoming said that will let regulators and financial institutions confirm in real time whether reserves matching FRNT issuance are in place.

Wyoming will also adopt Chainlink’s Secure Mint feature. Under that system, new stablecoins can be issued only when verified reserves are equal to or greater than the total FRNT supply.

The feature is designed to reduce the risk of large-scale token issuance without reserves due to hacking or smart-contract errors. Chainlink has linked reserve data to the token issuance function so that new minting stops when reserves are insufficient.

Wyoming last month also moved FRNT’s cross-chain transfer system from LayerZero to Chainlink’s Cross-Chain Interoperability Protocol, or CCIP.

FRNT was launched in January as the first stablecoin issued directly by a U.S. state government.