The New York Department of Financial Services (NYDFS) has granted Japanese firm GMO-Z.com Trust Company Inc. a charter to issue, administer, and redeem Japanese Yen and U.S. Dollar-pegged stablecoins in New York. The Japanese Yen stablecoin will be the first of its kind available to the public.
The charter was granted under New York Banking Law to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset. The NYDFS has approved 27 charters and licenses for companies engaged in virtual currency business activity, including the charter granted to GMO.
The approval allows GMO to launch both JPY-pegged stablecoin (GYEN) and USD-pegged stablecoin (ZUSD) in the U.S. Both GYEN and ZUSD can be purchased and redeemed directly from GMO Trust and will be powered by Ethereum’s leading blockchain-based technology. They will be available globally, except in Japan, later in the month.
GYEN will be the world’s first regulated JPY-pegged stablecoin. There are currently other regulated stablecoins, but none are pegged to JPY.
In July, the NYDFS announced the formation of a new division called the Research and Innovation Division which will be responsible for licensing and supervising virtual currencies and related businesses.
The division is also responsible for granting the virtual currency license, known as BitLicense, to businesses to provide virtual currency services for customers across the State of New York. PayPal recently received a first-of-its-kind conditional Bitlicense from NYDFS for the crypto trading service.
The controversial BitLicense regulatory framework, which came into effect on August 8, 2015, is aimed at monitoring and regulating cryptocurrencies such as Bitcoin and cryptocurrency-related products being offered in the State of New York and to New York residents.
The New York regulator has granted only twenty BitLicense’s since the initiation, after approving the first BitLicense to industry startup Circle in September 2015.
BitLicense is dubbed as one of the most restrictive cryptocurrency regulatory frameworks in North America. More than fifteen digital currency companies left the New York state because of the new regulations, including Vaultoro, Shapeshift, Paxful, Poloniex, Bitfinex, and Kraken – in something called “Great Bitcoin Exodus.”
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