NYDFS USD-backed stablecoin guidance regulation

Regulation · PageRank 0.0052

Also known as: NYDFS June 2022 stablecoin guidance

Overview

On 8 June 2022 the New York State Department of Financial Services issued industry guidance on the issuance of US dollar-backed stablecoins by NYDFS-regulated entities, making it the first US financial regulator to publish such expectations. The guidance sets requirements in three areas: full backing, requiring the market value of reserves to be at least equal to the nominal value of all outstanding stablecoins as of the end of each business day; redeemability, requiring an NYDFS-approved redemption policy giving holders the right to redeem at 1:1 for US dollars, generally within two business days; and independent auditor examination and attestation on management's reserve assertions. Regulated firms were required to comply by 8 September 2022, apart from the internal control attestation requirements.

Within the DeFi Intel graph, NYDFS USD-backed stablecoin guidance connects to 7 tracked entities, most strongly to NYDFS, Paxos, Gemini Trust Company.

Relations

Top connections in the DeFi Intel knowledge graph (confidence-weighted, 7 of 7 total).

Frequently asked questions

When did NYDFS issue its stablecoin guidance?

On 8 June 2022, applying to US dollar-backed stablecoins issued by NYDFS-regulated entities.

What redemption standard does the guidance set?

Holders must be able to redeem at a 1:1 exchange rate for US dollars under an NYDFS-approved policy, with timely redemption generally meaning within two business days of the issuer receiving the order.

What is the reserve requirement?

Stablecoins must be fully backed, with the market value of reserves at least equal to the nominal value of all outstanding units as of the end of each business day.