New York Financial Regulator Issues Formal Guidance on Stablecoins

The guidance sets out a number of requirements that regulated regulation is when something is controlled by a specific set of rules. New York cryptocurrencies must meet in order to issue and trade stablecoins.

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NYDFS published guidance for regulating stable USD-linked currencies.
It requires liquid asset reserves to guarantee the swaps, as well as audits.
The move is the latest sign of regulators’ interest in stablecoins.

The New York Department of Financial Services (NYDFS), which oversees regulated cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. companies in that state, has released regulatory guidance for the stablecoins backed by U.S. dollars.

NYDFS Superintendent Adrienne A. Harris, announced this Wednesday the issuance of the new guidance in a statement published on the official website of the entity. The guidance sets out the key criteria and requirements for stable coins issued by entities regulated by the NYDFS. The news outlet CoinDesk reportó primero.

NYDFS issues guidance for stablecoins

The regulatory framework addresses a number of requirements that must be met by companies that issue stablecoins in New York State, in terms of backing and redeemability, reserves and audits. According to the guidance, stable currencies traded in that state must be fully backed by certain assets held in custody custody is a financial institution's legal capacity to keep and preserve financial assets for its clients to avoid asset theft or loss. by an authorized institution.

At the same time, in order to ensure the liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. of the swaps, the regulator provides that the stablecoin reserve is collateralized by funds comprised of U.S. Treasury bills with no more than three months to maturity; U.S. Treasury notes; certain types of U.S. Treasury bonds or reverse repurchase agreements that are collateralized by Treasury bills.

The regulator also said this asset pool must be segregated from the assets owned by the issuing entity and subject to audits by an independent U.S.-licensed accountant.” The Reserve should be subject to a review of management’s assertions at least once a month. “, with read in the guide .

While these are the main requirements for issuing an authorization to an issuer of stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. The NYDFS clarified that there could be others based on a “ range of potential risks ” that the regulator analyzes. He mentioned, among them, cybersecurity, technological design, compliance with anti-money laundering (AML) measures and the strength of the issuer.

The purpose of this Regulatory Guide is to set out the basic requirements that will generally apply to stable U.S. dollar-backed currencies issued under the supervision of the DFS. However, the DFS may impose different requirements on any particular USD-backed stable currency currency is a medium of exchange that defines value. arrangement and will require clear and conspicuous disclosure of such different requirements. .

Ensuring the soundness of issuers and reserves

En entrevista con CoinDesk Harris noted that the idea behind the guidance is to formalize both consumer protection and institutional strength. The superintendent also mentioned the case of the collapse of the stablecoin UST, from Earth He said the rules were already on their way regardless of that event.

“ As we think about stable currencies and this guide, and this is something in which we we have been working before the events of the last month We really aim to achieve these things for a stable currency market, safety and soundness of institutions, market an area or arena, online or offline, in which commercial dealings are conducted. stability and consumer protection. “The superintendent commented to the media.

The New York regulator’s move is the latest sign of regulators’ interest in applying stricter rules to stable currencies. After the dramatic implosion of Earth last month, that wreaked havoc in the broader market of stablecoins In a number of countries, legislators and watchdog agencies have shown intentions to delve deeper into regulation of this space.

It should be noted that the language of the guide recognizes the growth that has been experienced by the stablecoins around the world in recent years and admits that this trend has led to increased interest from legislators and regulators to apply rules to the sector.