- New York Department of Financial Services approves issuance of USD-pegged crypto tokens.
- Regulator seeks to promote financial innovations.
- Market turns a deaf ear to the positive news.
The New York Department of Financial Services (NYDFS), one of the strictest financial regulators in the USA, has approved two applications for creating digital tokens tied to the US Dollar.
The new stablecoins will be produced by Gemini Trust Company, founded by Winklevoss twins, and Paxos Trust. The platforms that cannot hold fiat currencies on behalf of their clients will be able to use them as a proxy for actual USD. Basically, the new coins will function as their predecessor and the most well-known stablecoin Tether (USDT).
“As part of the approval of these new products, DFS has established required conditions to ensure that each trust company maintains robust policies and procedures to address risks and apply New York’s strong standards and regulations regarding anti-money laundering, anti-fraud, and consumer protection measures,” the regulator said in the official press-release published on Monday.
The regulator claims that the decision was based on an in-depth review and analysis of the applications for compliance with strict requirements for digital products. Apart from that, the permissions granted by NYDFS subject to specific regulatory conditions, which will be inspected by regulator and independent consultants.
According to Department of Financial Services Superintendent Maria T. Vullo this decision proves that the existing regulatory system does not prevent innovation in the financial industry.
“As the financial technology marketplace continues to evolve, New York is committed to fostering innovation while ensuring responsible growth. These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework that safeguards regulated entities and protects consumers,” she said.
Meanwhile, major cryptocurrencies hibernate at current levels after an unconvincing recovery from Saturday’s low. Bitcoin has gaine 0.53% on a daily basis, but the majority of coins are sill in red. Total cryptocurrency market cap is set at $196B. Since September 5, the industry lost $43B.
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