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XRP and Dogecoin Fall Off New York Greenlist — What’s Keeping BTC and ETH Unscathed?

Published September 19, 2023 9:28 AM
James Morales
Published September 19, 2023 9:28 AM
Key Takeaways
  • New York’s Department of Financial Services (DFS) has amended its greenlist of approved cryptocurrencies.
  • Dogecoin, Litecoin, Stellar Lumens and XRP are among the removed tokens.
  • Meanwhile, Bitcoin and Ether are the only non-stablecoins that remain greenlisted.

New York’s Department of Financial Services (DFS) oversees the conduct of companies dealing in virtual currencies. As part of its remit, the agency publishes a “greenlist” of coins that firms may do business with.

Until recently, the DFS greenlist  consisted of 25 tokens, ranging from stablecoins to various alt coins including XRP and Dogecoin (DOGE). However, on Monday, September 18, the regulator dramatically altered the makeup of the list. But why?

Greenlist Shake-up Takes no Prisoners

From a list  that contained popular altcoins such as Bitcoin Cash, ChainlinkDogecoin, Ethereum Classic, Litecoin, Stellar Lumens, Synthetix and XRP, the amended greenlist consists of just 8 approved tokens.

Henceforth, virtual asset businesses that want to transact with non-greenlisted coins will need to notify the DFS at least ten days prior to offering the relevant services in the State of New York.

After Monday’s redrafting, the greenlist consists of just six stablecoins issued by DFS-registered entities plus Bitcoin and Ethereum.

New York Department of Financial Services (DFS), Cryptocurrency coins greenlist
  The updated DFS greenlist.

Alongside changes to its greenlist, the DFS has also proposed new guidance for coin-listing policies and enhanced requirements for retail consumer-facing businesses.

In a press release  announcing the changes, the DFS wrote that the “proposed guidance for Coin-listing and guidance on the General Framework for Greenlisted Coins enhances the original framework issued by the Department in 2020.”

“The enhancements have been developed through ongoing supervision, and the guidance aligns best practices across all entities,” it added.

Why BTC and ETH Were Saved From Delisting

In the updated framework  for greenlisted coins, the DFS said it will consider adding a coin to the Greenlist if: 

  1. The coin or coin issuer has a demonstrated, “historic record consistent with safety and soundness and the protection of customers, including broad marketplace adoption,” or
  2. The coin is a stablecoin approved by the DFS for issuance in New York by a registered entity.

Regarding the 8 coins that remain on the updated greenlist, 2) explains the presence of stablecoins issued by Gemini, GMO and Paxos.

Meanwhile, the first requirement implies that only Bitcoin and Ether have a sufficient history of “safety and soundness.”.

While advocates of the recently delisted altcoins may contest their removal from the greenlist on the grounds of safety, the second part of the statement leaves little room for interpretation.

Bitcoin and Ether’s position as the two cryptocurrencies with the largest market capitalization has remained uncontested for years. If their large market cap defines the bar for “broad marketplace adoption,” no other token comes close. 

highest market cap cryptocurrencies, tokens, coins, top five, top 5
  Top 5 highest market cap cryptocurrencies.

Even the world’s most popular stablecoin, USDT, which has the third-largest market cap at over $83B, would need to more than double its circulation in order to compete with ETH for the number two spot.

As for BTC, at present, its total circulating supply is at over $500B. And during previous peaks, its market cap has swollen to over a trillion dollars.

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