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stablecoin

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On December 29, 2020, New York State’s Department of Financial Services (DFS) granted a charter under New York Banking Law to GMO-Z.com Trust Company Inc., to operate as a limited liability trust company. With DFS approval, GMO is authorized to issue, administer, and redeem Japanese Yen and U.S. Dollar-pegged stablecoins in New York. The Japanese Yen stablecoin will be the first of its kind available to the public. New York, a leading global financial center, has had an interesting history with cryptocurrency. We…

On December 2, 2020, three members of the U.S. Congress issued a press release concerning the introduction of the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, which they touted as a consumer protection statute. The proposed legislation seeks to increase the oversight and regulation of stablecoins. The STABLE Act would: Require any prospective issuer of a stablecoin to obtain a banking charter;Require that any company offering stablecoin services must follow the appropriate banking regulations under the…

Bank of England Governor Speaks About the Future Shape of Stablecoin Regulation On 3 September 2020, Andrew Bailey, the Governor of the Bank of England, delivered a speech to the Brookings Institution regarding innovation in payments, setting out his view that innovations need to be underpinned by an appropriate regulatory framework to be suitable for use on a wider scale. In his view, stablecoins have the potential to be suitable for widespread use, but must…

Bank Frick, a Liechtenstein-based private bank, began offering cryptocurrency investment services to its existing customers in the first quarter of 2018. Bank Frick continued to pursue and develop various aspects of its digital token service offerings. For example, it established a subsidiary, DLT Markets in February 2019, to provide institutional investors with an independent trading platform for the digital token asset class. As of May 26, 2020, Bank Frick began offering support for US Dollar…

The Council of the EU and the European Commission have published a joint statement on stablecoins. As expected this states that no global “stablecoin” arrangement should operate in the EU until “the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.” While the statement recognizes that “stablecoins” may present opportunities in terms of cheap and fast payments, for example, with cross-border payments, it lists a multitude of “challenges and risks”. These…

On September 11, 2019, the Swiss Financial Market Supervisory Authority (FINMA) has issued guidance on the regulatory treatment of stable coins. As a supplement to the previously issued ICO Guidelines, FINMA outlines how it treats stable coins under the Swiss regulatory framework. In this connection, FINMA also gives initial indications on the request for a regulatory assessment filed by the Geneva-based Libra Association, a high-profile cryptocurrency project orchestrated by Facebook Inc. There is no special…