The New York State Department of Financial Services (NYDFS) has authorized asset manager WisdomTree to function as a limited-purpose trust company under the New York Banking Law.
The firm announced on March 22 that the trust company charter will permit the launch of its personal finance mobile application, WisdomTree Prime, in New York under enhanced regulatory oversight.
The new approval will enable WisdomTree to realize its vision of becoming a market leader in the swiftly evolving digital asset industry in New York, according to a letter from Jonathan Steinberg, the company’s founder and CEO:
“The New York State Department of Financial Services is the premier regulator for businesses that engage in digital asset activity. This well-established trust company charter program – which long predates digital assets – is based on bank-grade regulation, allowing us to offer products that capitalize on innovation without sacrificing customer protection.”
Under the newly established WisdomTree Digital Trust Company, the charter authorizes WisdomTree to provide digital asset custody services, such as wallet services, DFS-approved stablecoin issuance, and reserve management.
WisdomTree Digital Trust intends to introduce the WisdomTree Dollar Token and the WisdomTree Gold Token within its mobile application as part of the inauguration of the new charter.
The company stated that it will maintain reserves for those assets following the Department of Financial Services’ (DFS) framework.
The DFS framework mandates that issuers of stablecoins must provide adequate reserves to back the asset entirely. This entails that the market value of the reserves must be equivalent to or greater than the nominal value of the outstanding stablecoin units.
Additionally, issuers must ensure that stablecoins can be redeemed at a 1:1 exchange rate against the U.S. dollar.
In December 2023, WisdomTree surpassed $100 billion in total assets under management (AUM). The firm’s AUM stood at $99.5 billion as of January 2024.
Additionally, the banking charter permits the asset manager to distribute its personal finance application to New York retail investors. It is already available on the Apple App Store, and Google Play is the application.
