The New York State Department of Financial Services has new rules for firms that issue stable coins.
Current holders of the BitLicense, the business license for virtual currency businesses operating in New York State, or limited purpose trust charter holders that issue stable coins backed by fiat currency are affected by the guidance.
Stable coins are expected to be backed by a reserve of assets and redeemed by investors. The requirements for those reserves included the various assets the reserves should comprise and a specification that they be separated from the proprietary assets of the issuing entity. Monthly audits should be submitted by issuers.
Stable coins have been the focus of regulators in recent months due to the lack of transparency around trading these virtual assets and the reserves backing them.
The collapse of TerraUSD, the Terra network's dollar-pegged stable coin, resulted in $60 billion in investor losses and made regulators more focused on the space.
TerraUSD is a different type of stable coin than the ones addressed in the New York regulators' guidance on Wednesday, but the saga has raised the profile of these assets and has hurt the industry.
The New York State Department of Financial Services is making it transparent and clear to the marketplace that these are expectations for their stable coins. At 3 p.m., CNBC interviews Harris. There is an event on the world of crypts.
She said that it was incumbent on them as a prudential regulator to keep up with the innovation in that space.
The BitLicense was created by the New York State Department of Financial Services.
VOLT was launched by Harris to address delays in regulatory processes for virtual currency businesses. VOLT stands for Vision, Operations, Leadership and Technology, and the initiative includes a number of measures to address each of those.
She is committed to making the agency's systems run more smoothly as the industry changes. This also includes hiring talent at a rapid pace.
Harris said that bringing in that talent would help accelerate the licensing process without sacrificing the regulatory rigor that it requires.
With Harris just six months into the job, many are wondering if New York will be a good place to start a business. The mayor of New York City wants the city to become a hub for cryptocurrencies.
The state of New York is at risk of losing talent to other tech hubs like Miami or Austin, according to critics. Harris said that the agency has issued three BitLicenses so far this year.
New York-based and regulated companies were the majority of venture capital investment in the cryptocurrencies space in 2011. Clear rules of the road, strict regulation, and talent in New York are all things that attract companies to the city. To make sure that we have those protections in place and that we want those companies to be here.
The agency said there are 22 BitLicensees. Over time, some BitLicenses have been surrendered. 9 limited purpose trust charters have been issued by the sds.
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