Guidance on the Issuance of U.S. Dollar-Backed Stablecoins
- Source: dfs.ny.gov
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The NY Department of Financial Services (DFS) has released guidance on the issuance of USD backed Stablecoins issued by DFS regulated entities. Sen. Kirsten Gillibrand stated “This bill is a comprehensive approach to how to create safety and soundness in this industry, how to create transparency, accountability and how to create consumer protections”
The guidance sets out new criteria against three areas, redeemability, asset reserves and attestations about reserves:
- Redeemability – Stablecoin must be fully backed by a Reserve of assets. Notably, the market value of the Reserve must be at least equal to the nominal value of all outstanding units of Stablecoin at the end of each business day
- Asset Reserves – Detailing guidance on how the reserve should be held and specific assets the reserve may consist of:
- How the reserve should be held – Asset reserves must be segregated from the proprietary assets of the issuing entity and must be held by a depositary institution/custodian that has been approved by the DFS
- Specific asset categories the reserve can only consist of – US Treasury bills (acquired three months or less from their maturities), Government money market funds (subject to a limit on how much of the reserve ca be held in such funds), Deposit accounts at US state or federally chartered depositary institutions and Reverse repurchase agreements fully collateralized by US treasury bill.
- Attestations – Stablecoin issuers will need to be audited by an independent certified public accountant at least once per month
DFS regulated issuers of Stablecoin are responsible for understanding and complying with all applicable laws and regulations.