The guide sets out a series of requirements that New York regulated crypto firms must meet in order to issue and operate stablecoins.
- NYDFS released guidance to regulate USD-pegged stablecoins.
- It requires liquid asset reserves to guarantee swaps, as well as audits.
- The move is the latest sign of interest from regulators in stablecoins.
The New York Department of Financial Services (NYDFS), which oversees regulated cryptocurrency businesses in that state, has published regulatory guidance for stablecoins backed by US dollars.
NYDFS Superintendent Adrienne A. Harris announced this Wednesday the issuance of the new guide in a statement published on the entity’s official website. The guide sets out the fundamental criteria and requirements for stablecoins issued by NYDFS-regulated entities. the news medium CoinDesk reported first.
NYDFS issues guidance for stablecoins
The regulatory framework addresses a series of requirements that issuer companies must meet. stablecoins in the state of New York, in terms of support and redeemability, reserves and audits. According to the guide, stablecoins traded in such a state must be fully backed by certain assets held in custody by an authorized institution.
At the same time, and with the aim of guaranteeing the liquidity of the swaps, the regulator establishes that the stablecoin reserve be guaranteed by funds made up of US Treasury bills with no more than three months to maturity; US Treasury notes; some types of US Treasury Bonds or Reverse Repurchase Agreements that are secured by Treasury bills.
The regulator also said that this pool of assets must be separated from the assets owned by the issuing entity and audited by an independent US-licensed accountant.”The Reserve must be subject to a review of management assertions at least once a month“, I know read in the guide.
Although these are the main requirements to issue an authorization to an issuer of stablecointhe NYDFS clarified that there could be others based on a “variety of potential risks” that analyzes the regulator. He mentioned, among them, cybersecurity, technological design, compliance with anti-money laundering (AML) measures and the solidity of the issuer.
The purpose of this Regulatory Guide is to set forth the basic requirements that will generally apply to US dollar-backed stablecoins that are issued under the supervision of the DFS. However, the DFS may impose different requirements on any particular USD-backed stablecoin deal and will require clear and conspicuous disclosure of such different requirements..
Ensuring the soundness of issuers and reserves
In interview with CoinDesk, Harris highlighted that the idea behind the guide is to formalize both consumer protection and institutional soundness. The superintendent also mentioned the case of the collapse of the stablecoin UST, of earth; although he said that the rules were already on the way regardless of that event.
“As we think about stablecoins and this guide, and this is something we we have been working before the events of last monthreally our goal is to achieve those things for the stablecoin market, the safety and soundness of the institutions, the stability of the market and consumer protection”, commented the superintendent to that medium.
The New York regulator’s move is the latest sign of regulators’ interest in applying stricter rules to stablecoins. After the dramatic implosion of earth last month, which wreaked havoc on the broader market of stablecoinsthe legislators and control organisms of several countries have shown intentions to delve further into the regulation of said space.
It should be noted that the language of the guide acknowledges the growth experienced by stablecoins around the world in recent years and admits that this trend has generated greater interest from legislators and regulators to apply rules to the sector.
Article by Hannah Estefanía Pérez / DailyBitcoin
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