India Preparing for a CBDC-Driven Economy: Central Bank Governor’s Vision
Outgoing Reserve Bank of India Governor Shaktikanta Das believes that the digital rupee has the potential to transform India's economy.
Paxos Trust Company, the New York-based stablecoin issuer behind Binance USD (BUSD) and Paxos Dollar (USDP), is reportedly being investigated by the New York Department of Financial Services (NYDFS). The exact motive behind the probe is currently unknown. However, an NYDFS spokesperson noted that the department is working to protect consumers from risks associated with investing in the cryptocurrency market.
Paxos has issued BUSD, a US Dollar-collateralized stablecoin, since partnering with Binance in September 2019. It is the third largest stablecoin with a market cap currently exceeding $16 billion and is also the creator of the Paxos Dollar (USDP) and the founder of PAX Gold (PAXG), a gold-backed-Ethereum token. The NYDFS issued Paxos with a BitLicense in 2015, which permits companies to conduct digital currency-related activities in New York.
Paxos claims that these stablecoins are backed wholly by US dollars and the US Treasuries. If the alleged reports of the NYDFS probe are fact, it wouldn’t be the first investigation launched by the NYDFS. Leading cryptocurrency exchange Coinbase reached a settlement with the department earlier this year after failing to oversee an regulate suspicious transactions from customers without conducting background checks on the users.
As reported, this comes in addition to the investigation into Paxos, the United States Securities and Exchange Commission (SEC) is also reportedly investigating Kraken, one of the leading cryptocurrency exchanges in the U.S., over possible breaches of legislation regarding the offering of securities in the country. An anonymous source said the investigation is already underway and a settlement could be reached soon, but the specific tokens or cryptocurrencies in question were not stated.
SEC Chairman Gary Gensler had warned that the goal for regulating cryptocurrency is to make sure cryptocurrency trading exchanges and digital assets lending platforms are compliant with the law, otherwise, they will not last. Kraken CEO Dave Ripley stated that he had no intention of registering Kraken with the SEC because it does not offer securities, but Gensler noted that most cryptocurrencies other than Bitcoin are considered securities by the SEC.
As the regulatory landscape continues to evolve, it will be important for exchanges and players in the market to understand and comply with the rules to avoid enforcement actions, particularly as the classification of cryptocurrencies as securities remain undefined. The NYDFS also recently reached a $100 million settlement with Coinbase after they failed to oversee 100,000 suspicious transactions, and published a stablecoin guidance report after the collapse of Terra LUNA ecosystem and its algorithmic stablecoin TerraClassicUSD (USTC).