DFS approves first gold-backed virtual currency in NYS

11225394_892546234160850_1173950327599401243_nThe state Department of Financial Services recently authorized Paxos Trust Company LLC to offer a gold-backed virtual currency, the first such virtual currency authorized by the DFS, as well as BUSD, a virtual currency pegged to the U.S. dollar.

DFS issued a limited purpose trust company charter in May 2015 to Paxos Trust Company to offer services for buying, selling, sending, receiving, and storing virtual currency. In September 2018, Paxos was authorized by DFS to offer its first asset-backed token – commonly known as “stablecoin” – pegged to U.S. dollars, Paxos Standard.

DFS has now authorized Paxos to offer PAX Gold, an asset-backed token that is pegged to gold

The products are subject to New York’s anti-money laundering, anti-fraud, and consumer protection, and cybersecurity measures.

“DFS is committed to encouraging innovation while providing regulatory oversight to keep New Yorkers and the rapidly evolving financial services market safe and sound,” said DFS Superintendent Linda Lacewell. “These approvals reflect DFS’ leadership in the virtual currency arena and our priority to protect consumers in every decision we make.”

DFS became the first state or federal agency in the United States to supervise virtual currency with the promulgation of its landmark regulation in 2015.

To learn more, visit the DFS website.

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