New York approves the first Japanese yen-pegged stablecoin

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The New York Department of Financial Services has approved the first Japanese yen-pegged stablecoin in the U.S. market. The regulator granted a charter to GMO-Z.com Trust Company Inc. to issue the GYEN stablecoin in the state.

In a press release, NYDFS Superintendent Linda Lacewell announced that the company “is authorized to issue, administer, and redeem Japanese Yen and U.S. Dollar-pegged stablecoins in New York. The Japanese Yen stablecoin will be the first of its kind available to the public.”

The NYDFS also approved the issuance of the ZUSD, a U.S. dollar-backed stablecoin developed by the same company. GMO-Z is a subsidiary of Tokyo-based IT giant GMO Internet, a company that focuses on Internet infrastructure, online media and mobile entertainment.

GMO-Z becomes the 27th company to receive the coveted BitLicense which allows digital currency companies to operate in the state of New York. According to Lacewell, this is part of the NYDFS’ effort to stay at the forefront of innovation. The most recent charter is especially important as stablecoins take on growing significance in the digital currency industry, the Superintendent remarked.

Ken Nakamura, the President and CEO of GMO-Z stated, “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset. But we are also pioneers and innovators in this space who envision building new applications of blockchain technology that transform our relationship with traditional financial services.”

GMO-Z started developing the GYEN in October 2018, targeting cross-border digital currency transactions. It launched the Ethereum-based stablecoin a year later. The company is also engaged in the digital currency exchange and block reward mining sectors. GMO also claims to operate the world’s largest online forex trading platform.

The stablecoin sector has gained a lot of traction in recent years. While Ethereum has been the blockchain most stablecoin developers have used, Bitcoin SV is now emerging as the better alternative. In September, USDC became the first stablecoin on the Bitcoin blockchain following a partnership between RelayX and Run.

The stablecoin rise has attracted the attention of regulators globally. In the U.S., a lawmaker recently tabled the STABLE Act that seeks to treat stablecoin issuers as banks. The Act requires these issuers to obtain a bank charter and the approval of the Federal Reserve six months before starting operations.

See also: CoinGeek Live panel, Regulation of Digital Assets & Digital Asset Businesses