On Tuesday, Japanese tech conglomerate GMO Internet Group announced that it has been approved by the New York Department of Financial Services, which licenses and regulates all financial products and services in New York state, to issue the world’s first regulated JPY-pegged stablecoin, which will trade under the ticker symbol GYEN, and a USD-pegged stablecoin, under the ticker ZUSD.
The JPY-pegged stablecoin (or digital coin whose value is pegged to a fiat currency), along with the U.S. dollar-pegged stablecoin, will be available globally through GMO’s listed purpose trust company, GMO Trust, in January 2021, and can be directly purchased and redeemed through GMO Trust, or via a number of global digital asset exchanges with which GMO has strategically partnered to enhance the accessibility and liquidity of the assets.
In a company statement, GMO said that New York regulator approval was contingent on its meeting stringent cybersecurity requirements, along with federal standards for anti-money laundering and economic sanctions.
“We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset,” GMO Trust Company President and CEO Ken Nakamura said on Tuesday. “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.”
GYEN and ZUSD, which are 100 percent fiat-backed, redeemable on a 1:1 basis, and powered by the Ethereum blockchain, can be leveraged by institutional firms and retail clients for trading, institutional hedging, arbitrage, settlements, and payments.
GMO currently operates the world’s largest online forex trading platform, which has been the global market leader in yearly forex trading volume for seven straight years. It also operates a Japanese Financial Services Agency (FSA) regulated Internet bank. In 2017, it launched a digital currency exchange regulated by the Japanese FSA, and a large Bitcoin mining operation.
News from Paxos
Earlier this month, digital assets innovator Paxos—which has been an early mover in digital payments and in nurturing greater institutional acceptance of these assets— announced it has closed a $142 million Series C round of funding.
Declaration Partners, the investment firm backed by the family office of David M. Rubenstein, led the round, which includes investments from Mithril Capital (the Austin, Texas VC firm co-founded by Ajay Royan and Peter Thiel), PayPal Ventures, Britain’s RIT Capital Partners plc, billionaire investor Ken Moelis, hedge fund Senator Investment Group and more. Previous Paxos investors also participated in the round, including RRE Ventures and Liberty City Ventures.
The funding round comes at the tail end of a year in which Paxos launched its Paxos Crypto Brokerage, a platform solution that powers crypto services for PayPal and Revolut US, issued more more than $7.5 billion in stablecoins across three of the leading U.S. dollar-backed stablecoin tickers; became the first company to settle US equity trades on a blockchain outside of the legacy system; and confirmed more than $3.5 trillion in commodities trades with its Post-Trade automation service.
To date, Paxos—whose board members include former FDIC chair Sheila Bair, former NYSE CEO Duncan Niederauer and Senator Bill Bradley—has raised more than $240 million in funding.
Paxos will continue investing in developing enterprise-grade infrastructure solutions while deepening its commitment to regulation, reliability and security. Paxos will use this capital to accelerate growth, including scaling its operations and platform capacity to meet the demands of its expanding customer base. The company plans to double the size of its team and will explore all opportunities for growth.
