New York ‘Greenlists’ First JPY-Pegged Stablecoin
NYDFS Licenses GMO-Z.com Trust Company to Issue GYEN/ZUSD for Retail, Institutional Traders
GMO-Z.com Trust Company, Inc. (GMO Trust) has been cleared by the New York Department of Financial Services (NYDFS) to issue the first JPY-pegged stablecoin (GYEN), with the US dollar-pegged stablecoin, USD (ZUSD), delivering highly-regulated tokens that meet stringent security standards for retail and institutional clients.
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Our goal is to connect traditional finance and blockchain for everyone, paving the way for a digital transformation by building financial-grade digital assets through rigorous policies, government oversight and security standards.
We seek to address the regulatory and compliance issues that have impeded the industry’s adoption of blockchain technology with a digital asset-backed by one of the world’s most traded currencies.
With the approval, we are able to offer a stablecoin that comes with the oversight of regulated financial institutions, ensuring additional layers of protection for customers, with measures to minimize the risk of financial crime. All customers are subjected to a robust know-your-customer review by our compliance team.
As a trust company chartered by the NYDFS, GMO Trust was required to submit all products and services for a rigorous review. To win approval, the company was subjected to the standards of federal banking regulations for cybersecurity, capital reserves, economic sanctions and anti-money laundering (AML).
“Our AML team — operating from New York and Japan — monitors transactions for sanctions compliance and unusual activity, as well as supports customers during the onboarding process,” said Joe Hanvey, SVP who oversees AML and Bank Secrecy Act compliance for GMO Trust.
“We are fortifying the stablecoin as a digital asset, fueling momentum for its mainstream acceptance by seeking NYDFS approval and complying with international standards, including those set by the Financial Action Task Force that address the Travel Rule, beneficial ownership, regulatory reporting and risk controls.”
The stablecoins are 100% fiat-backed and always redeemable 1:1, meaning there are never more tokens in circulation than are custodied in a U.S. bank. GMO Trust holds the U.S. dollar and Japanese yen deposits of all customers in segregated accounts at Federal Deposit Insurance Corp.-insured banks.
An independent, nationally recognized public accounting firm conducts monthly third-party assessments on dollar and yen reserves to ensure full collateralization.
The stablecoins are powered by Ethereum’s leading blockchain-based technology and are available on exchanges globally among the most liquid digital assets.
As a New York subsidiary of GMO Internet Group, GMO Trust is part of an established culture of regulatory compliance, as well as extensive industry expertise and digital asset innovation.
GMO Internet Group is a publicly traded Japanese IT, financial and digital asset conglomerate with the largest global FX volume. Founded in 1991, it operates an Internet bank and the largest payment gateway business in Japan, which transacts roughly 4 trillion yen, or $40 billion, each year. Both are regulated by the Japanese Financial Services Agency (FSA).
Additionally, it operates a digital currency exchange — the second largest digital asset business in Japan — also FSA-regulated, and a large Bitcoin mining operation.
The stablecoins join BTC, BCH, ETH, LTC, BUSD, GUSD, PAXG and PAX and others on the “greenlist” for virtual currencies.
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