Thread by @propelforward

#NYDFS issues USD backed #stablecoin guidance; must be fully backed by an asset reserve; issuer must adopt a clear redemption policy, approved by DFS in writing (!!!) redemption at par in fiat; reserve must be held in custody with /1
dfs.ny.gov/reports_and_pu…

US state/federally chartered depository institutions and/or asset custodians. Reserve must be held in govt treasuries "subject to DFS- approved reqs re: overcollaterialiation." Reserve must be subject to independent audit 1x month by independent CPA under AICPA attestation /2

standards. DFS may also impose obligations regarding cybersecurity and IT standards and evaluate issuer BSA/AML & Sanctions compliance, safety and soundness of the issuing entity; and the stability/integrity of the payment system, as applicable on Issuers. /3

DFS may impose "different requirements" on any #stablecoin backed by #USD & will require clear and conspicuous disclosure of any such different requirements. /4

Currently approved: #Paxos #USDP, #BUSD; #Gemini #GUSD, #ZUSD; Does not applyto USD-backed stablecoins listed, but not issued, by DFS-regulated entities but DFS expects "regulated entities that list USD-backed stablecoins" to consider this guidance when submitting a request /5

for coin issuance/ seeking approval for a coin self-certification policy. Expect ongoing iteration of this guidance and engagement by DFS with industry to learn more. Link to full guidance here: dfs.ny.gov/industry_guida…

guidance allows issuers to redeem net disclosed fees (permits income beyond treasuries yield); redemption must be "timely" i.e. T+2. DFS can vary this time when "timely redemption would likely jeopardize the Reserve’s asset-backing or the orderly liquidation of Reserve assets" /6

reserve assets must be held by state/federally approved institutions or custodians who are pre-approved by DFS & segregated from proprietary assets of issuer; reserve assets must be govt treasuries or DFS pre-approved deposit accounts /7

CPA attetsation must cover amount of stablecoin outstanding, issuer reserve, whether reserve at all times was sufficient to cover outstanding units of stablecoins and whether DFS imposed conditions were met at all times; /8

also requires annual attestation by CPA of management controls; monthly attestations made public within 30 days; annual attestation made public within 120 days; /9