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What The New York Department Of Financial Services Guidance Means For Stablecoins

 |  July 7, 2023

By: Elliptic

On June 8th, the New York Department of Financial Services (NYDFS) released guidelines specifically addressing US dollar-backed stablecoins, which are applicable to virtual currency businesses regulated by the NYDFS.

This development aligns with a series of significant regulatory actions concerning stablecoins, including similar initiatives undertaken by the United Kingdom, European Union, and Japan. Moreover, it coincides with ongoing deliberations in the US Congress regarding legislative proposals governing the issuance of stablecoins.

The timing of the NYDFS guidance comes as no surprise. The recent decoupling of the Terra/UST stablecoin has heightened regulatory concerns, prompting a sense of urgency in establishing oversight over stablecoin activities. The NYDFS press release explicitly mentions its close communication with virtual currency entities under its regulatory purview, particularly in light of recent events in the stablecoin market, an obvious reference to the Terra/UST incident…

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