New York being a worldwide center, the NYDFS is the top state financial supervisory authority in the US, well-known for its stringent rules. A license to run operations in the New York paves way for clearance in rest of the country.
The charter of GMO indicates that it is a limited liability trust company and do not offer full-fledged banking services, implying that it is not authorized to accept deposits.
As a stablecoin operator has to maintain reserves of the pegged currency. The charter of GMO provides the right to hold the pegged currency i.e. the Yen, but is not allowed to maintain deposits unrelated to the stablecoin. The firm is not allowed to “issue, administer, and redeem” other currencies unrelated to the stablecoins.
The freedom to put out charters that do not permit deposits has been often a subject of controversy among state regulators such as the NYDFS and national banking regulators in the US. Ken Nakamura, President and CEO of GM, stated: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.”
In recent times, the NYDFS has amended its popular BitLincense, including a contingent clause that brings together firms which had received licenses in recent times and entities that owns licenses for a long-period of time.
The foremost conditional BitLicense was issued to PayPal, paving way for the roll out of tis fresh cryptocurrency facilities earlier this year with the assistance of long-term license holder Paxos.