New York Department of Financial Services (DFS) has authorised Gemini Trust Company and Paxos Trust Company. It was authorisation to offer price-stable cryptocurrency, commonly referred as stablecoin, pegged to the US currency.

The approval was part of its effort to encourage the growth of fintech sector and virtual currency.

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As part of the process, DFS ensured that the two companies fulfilled all anti-money laundering, anti-fraud and consumer protection measures.

Department of Financial Services superintendent Maria Vullo said: “As the financial technology marketplace continues to evolve, New York is committed to fostering innovation while ensuring responsible growth.

“These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework that safeguards regulated entities and protects consumers.”

DFS issued a limited purpose trust company charter to Paxos and Gemini in May 2015 and October 2015, respectively.

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The limited approval enabled the two companies to provide customer services regarding purchase, sell, transfer and store virtual currency.

The new approvals for stablecoins were awarded following a comprehensive review of the two applications.

Gemini Trust Company CEO Tyler Winklevoss said: “To date, there has been no trusted and regulated digital representation of the US dollar on the blockchain.

“We are excited to bring the Gemini dollar to market, a stablecoin that combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of the NYDFS.”

Now, both the companies are authorised to exchange stablecoins against US currency Dollar. They are required to fulfil monitoring and recordkeeping requirements for such exchanges.