Its finally here: first-in-the-nation stablecoin guidance for regulated cryptocurrency entities. Some highlights:
- Backing and Redeemability: The stablecoin must be fully backed by a Reserve of assets, meaning that the market value of the Reserve is at least equal to the nominal value of all outstanding units of the stablecoin as of the end of each business day. The issuer of the stablecoin must adopt clear, conspicuous redemption policies, approved in advance by DFS in writing, that confer on any lawful holder of the stablecoin a right to redeem units of the stablecoin from the Issuer in a timely fashion at par for the U.S. dollar.
- Reserve Requirements: The assets in the Reserve must be segregated from the proprietary assets of the issuing entity and must be held in custody with U.S. state or federally chartered depository institutions and/or asset custodians.
- The Reserve must consist of the following assets: U.S. Treasury Bills acquired by the Issuer three months or less from their respective maturities, Reverse repurchase agreements fully collateralized by U.S. Treasury bills, U.S. Treasury notes, and/or U.S. Treasury bonds on an overnight basis, subject to DFS-approved requirements concerning overcollateralization, and Deposit accounts at U.S. state or federally chartered depository institutions, subject to DFS-approved restrictions.
- Independent Audits: The Reserve must be subject to an examination of management’s assertions at least once per month by an independent Certified Public Accountant licensed in the United States and applying the attestation standards of the American Institute of Certified Public Accountants.
The guidance may be found here: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202206081