N.Y. Department of Financial Services Issues Stablecoin Guidance

On June 8, 2022, the N.Y. Department of Financial Services (the “DFS”) issued guidance on when it will approve issuance by entities it regulates, including those that receive the “BitLicense” to engage in virtual currency business, of stablecoins. Among other things, the DFS says that for approval of issuance, it will require: (i) that stablecoins are backed fully by approved asset reserves held separately from other assets in approved custody, and that the reserves be subject to monthly audits; and (ii) that the issuer has “clear, conspicuous redemption policies”. This guidance may become the standard for other states as well.