Binance Stablecoin Gets Approval from New York Regulator

UTC by Chuks Chukwuka · 2 min read
Binance Stablecoin Gets Approval from New York Regulator
Photo: Depositphotos

Binance announced on Friday that its stablecoin has been given the nod by the financial regulatory body in New York. With this development, the final barrier to the use of the currency by financial institutions has been removed.

According to the statement from the firm, the New York State Department of Financial Services (NYDFS) gave its approval to the Binance USD (BUSD) this week as seen with its updated “Greenlist”. This implies that banks no longer need further approvals to start using the stablecoin. However, the guidelines stipulate that such banks notify NYDFS before listing BUSD.

Speaking on the development, Binance Compliance Officer, Samuel Lim said that licensed entities can accept the digital currency on “immediate basis” using JP Morgan as an example, Lim said that such licensed institutions can use BUSD without needing further approval.

Immediate Availability for Licensed Entities

Even though the currency was approved by the regulator at launch in September 2019, it wasn’t widely accessible because exchanges needed the approval to start using it.

NYDFS has already added digital currencies such as Bitcoin, Ethereum, Litecoin and the like on its Greenlist. Stablecoins such as Gemini Dollar are also approved by the regulator. 

Paxos Trust, the firm behind the white label Binance stablecoin is approved by NYDFS to issue stablecoins in 2018. This is why the regulatory hurdle was easy for Binance to scale.

Binance Coin Not Yet Listed by New York State Department of Financial Services

Interestingly, Binance Coin (BNB) was not listed as one of the approved digital assets by NYDFS. The company’s spokesperson declined to comment on if they are working to get the Binance token listed by the regulator. It is surprising to many cryptocurrency market watchers that the less known BUSD has been given the green light ahead of the internal token of the Binance ecosystem (BNB).

This may change soon since the Securities and Exchange Commission (SEC) seems poised to start scrutinizing the Binance blockchain. The regulator is already considering awarding the job of the examination of Binance chain to a New York-based forensic company, CipherTrace. In release seen last week, the agency stated:

“CipherTrace products are the only known blockchain forensics and risk intelligence tool that can support BNB and all tokens on the Binance network.”

Binance probably has more work on its hands as its U.S. exchange platform, Binance US is not yet operational in the state of New York.

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Chuks Chukwuka

Chuks is a blockchain enthusiast and finance researcher that has covered the crypto sphere for several years. He believes that the evolving technology would change how we do business.

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