The New York Department of Financial Services (NYDFS) has established strict requirements for issuing and managing stablecoins. These measures aim to strengthen investor security.
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Stablecoins in the sights of NYDFS
In a recent communiquéthe New York State cryptocurrency regulator has issued regulatory guidance for companies that issue cryptocurrencies. stablecoins.
First of all, these companies must ensure that the stablecoins are fully guaranteed by a reserve of assets whose market value corresponds at least to the nominal value of all units in circulation. They must also have well-defined redemption policies, with a maximum processing time of two business days.
Then the reserve of stablecoins must be held by a federally licensed depository institution. In addition, the latter can only include specific assets. These include US treasury bills, repurchase agreements and US treasury bonds.
Finally, an accountant will have to inspect the reserve on a monthly basis, while companies will be required to submit annual activity reports.
These requirements apply to companies offering services related to cryptocurrencies. Consequently, they also concern those who hold the very prestigious BitLicense accreditation, which only about twenty companies benefit from.
The aforementioned rules are not the only obligations that the regulator has set. Furthermore, the NYDFS has reserved the right to change them over time. If for the moment they only apply to stablecoins backed by the dollar, they could soon involve other currencies.
Towards generalized regulation
The United States is not the only country that wants to regulate stablecoins. Recently, the United Kingdom and Japan have expressed their desire to introduce regulations for this type of cryptoassets.
It seems that the fall of the TerraUSD (UST) influenced this movement. As a reminder, the price of the UST experienced a significant drop ranging from $1 to $0.01. However, before this fall, the stablecoins was already a matter of concern, especially with the US government.
In 2021, the Securities and Exchange Commission (SEC) stated that the regulation of stablecoins was his responsibility. More recently, Janet Yellen, the US Treasury Secretary, and Michael Hsu, the head of theOffice of the Comptroller of the Currency (OCC), called for the establishment of regulations for stablecoins.
The new requirements promoted by the NYDFS join those proposed by Senator Cynthia Lummis as part of the Responsible Financial Innovation Bill. The latter aims to create a regulatory framework for the entire cryptocurrency sector in the United States.
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June MAFFOCK
I came to blockchain out of curiosity and stayed with it out of passion. I was amazed by the possibilities it offers through its various use cases. With my pen, I hope to help democratize this technology and show how it can help make the world a better place.
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