New York state’s financial watchdog has formed a stablecoin-related partnership with the European Banking Authority.
The New York State Department of Financial Services (DFS) announced on Tuesday (June 2) that it has signed a memorandum of understanding (MOU) with the authority to allow for “the exchange of supervisory and confidential information” regarding stablecoins.
“Effective financial regulation depends on strong relationships between regulators, and international collaboration is essential for the digital asset space,” said Kaitlin Asrow, the NYDFS’ acting superintendent. “This MOU reflects the department’s deep commitment to cross-border supervision and collaboration in order to protect consumers and markets and enable responsible innovation.”
EBA Executive Director François-Louis Michaud called the agreement a milestone in boosting transatlantic cooperation on stablecoin supervision and ensuring high standards for cross-border activities.
“It reflects our commitment to building a strong, effective, and globally coordinated supervisory framework for crypto-assets,” Michaud added.
According to the announcement, the MOU is designed to strengthen the supervision of entities involved in stablecoin activities, identify trends and risks within the stablecoin market and promote that market’s integrity.
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DFS has supervised stablecoin issuance since 2018, governing regulated entities that are approved to issue stablecoins in New York.
The department said its framework for stablecoins includes “strong reserve requirements, confidence in redeemability, transparency, and a prohibition on rehypothecation.”
In other stablecoin news, PYMNTS wrote earlier this week about research showing that while digital assets have “entered the CFO conversation,” they are not yet part of everyday financial operations at most companies. This is due more to control than a fear of innovation.
“Finance chiefs are responsible for cash flow, liquidity, compliance, accounting and risk. That makes digital assets harder to justify when rules remain unsettled and internal systems are built around familiar bank and treasury workflows,” the report said. “Stablecoins appear to have a more practical path than cryptocurrencies, but even stablecoins remain a low priority for most CFOs until the surrounding infrastructure feels safer and easier to manage.”
According to the research, 77% of CFOs pointed to regulatory or compliance uncertainty when asked about barriers to using crypto in business payments. A slightly smaller number—67%—said the same thing about stablecoins.
The number of CFOs who said their firms have not discussed or considered using stablecoins came 58%, 70% for crypto. Just 13% of companies said they are currently using stablecoins, and just 5% use cryptocurrencies.
