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New York just cleared the first Yen-backed stablecoin – Cryptocurrencies

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The advantages of federalism in the United States: you only need to change state to legally sell cannabis, and states can run counter to a central government allergic to cryptos, by encouraging innovative projects in the cryptosphere.
A new stablecoin is born in New York: an opportunity for its issuer and for the New York regulatory authority to advertise.

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A Japanese stablecoin in New York

According to a press release dated December 29, 2020, the Department of State Financial Services of New Yorkthe New York Department of Financial Services, NYFDS – would have authorized the Japanese company GMO-Z.com to issue stablecoins guaranteed by the yen and the dollar American to New York.

The stablecoin backed by yen will be the first of its kind on American soil.

Given the status of financial center of New York, the NYFDS is one of the most important regulators of United States and this authorization paves the way for the expansion of the company’s business into other states.

The superintendent of NYFDS, Linda lacewell, indicated that this authorization demonstrated the commitment of NYFDS to promote innovation, while ensuring compliance with regulations to protect consumers and ensure market integrity.

A safe stablecoin: as safe as the value of the yen and the dollar?

The charter of GMO is that of a limited liability trust company and not that of a full-fledged bank. A stablecoin issuer generally needs to hold reserves of the asset as collateral.

For GMO, the types of deposits deemed non-essential to its ability to issue and manage its stablecoins are limited.

This point is the subject of a dispute between state regulators, such as NYFDS, and national banking regulators.

The CEO of GMO, Ken nakamura, stated that the issuance of a stablecoin guaranteed by the yen was a significant innovation and many would view this as a safe asset.

The NYFDS recently made changes to its license BitLicense, by creating a conditional format that links newly licensed companies to existing companies.

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PayPal is the first company to have benefited from this conditional format.

Do stablecoins really have a future, especially with the upcoming arrival of CBDCs? Is using the dollar as collateral enough to protect oneself from the lightning strike of lawmakers who will be tasked with protecting the hegemony of the greenback? While Tether (USDT) now finds itself in the SEC’s sights after the latter attacked Ripple (XRP), no crypto – except Bitcoin (BTC) – is immune from a legal storm.

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