The New York state regulator has approved GMO-Z.com Trust’s application for a conditional Bitlicense, which allows the company to issue and redeem stablecoins that are pegged to the Japanese Yen and US Dollar.
The US subsidiary of Tokyo-based IT conglomerate, GMO Internet, is the first to get the go-ahead from the New York State Department of Financial Services to launch a Yen-backed cryptocurrency.
Since the BitLicense was introduced back in 2015, the DFS has approved 27 licenses for companies engaged in virtual currency business, including the last charter granted to GMO.
“We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset. To win approval for the trust, the company had to meet stringent requirements for its cybersecurity programs, as well as meet federal standards for anti-money laundering and economic sanctions,” said Ken Nakamura, President and CEO of GMO-Z.com Trust.
The scope of the newly-acquired license, which allows GMO Trust to operate as a limited liability trust company, is lesser than NY typical crypto license in a way that it does not allow its carrier to handle deposits or provide more financial services.
The NY regulator introduced the conditional version after it was criticized for moving too slowly on issuing the Bitlicense license, which allegedly discouraged companies from coming to New York.
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PayPal was the first company to have been awarded this conditional approval that was meant to serve as a stepping stone en route to a full license.
GMO Internet originally floated plans to launch a yen-pegged stablecoin, whose value will not be fully affected by crypto market volatility, in 2018. The Tokyo-based company will, most likely, collaborate with a bank from Japan to develop the price-stable cryptocurrency, which should be issued in early 2020.
GMO’s JPY-pegged stablecoin (Ticker: GYEN) and USD-pegged stablecoin (Ticker: ZUSD) are expected to debut globally next month. GMO aims to create an entire ecosystem for its fiat-pegged stablecoins, with the next step being the foray into the international remittances and the payments market.
As part of their crypto strategy, the team developed a new blockchain called GYEN platform, which is in a beta testing stage.
GMO’s banking licenses in Japan offers a fully audited alternative, compared to the debatable stablecoins that have been the subject of controversy and regulatory scrutiny due to lingering questions about their fiat reserves.
Furthermore, the giant Japanese company offers products such as online advertising, internet infrastructure, internet security and mobile entertainment. GMO Click Securities has been the world’s largest FX provider by trading volume since 2012.