Improving Stablecoins with TapestryX NaL (Part3)

TapestryX NAL vs DLTs w/ smart contracts

Current Blockchain Solutions

• No Accounting

• Time-stamped (state change log) transfers only

• Continuous expanding active memory

• No record of future obligations

• Smart contracts used to record future obligations introduce significant operational and accounting challenges.

• Latency – delay in settlement

• Mining, Consensus or Validators

• Limited Performance

• Not Scalable

• Finite or diminishing capacity

• Limited to no interoperability with legacy infrastructure/other networks

• Difficult adoption & transition

• Customized (Unique Smart Contracts per use-case transaction)

Networked Accounting Ledger Technology (NAL)

• Double-Entry Accounting

• Transacting periods

• Archived transaction periods

• Future-dated obligations *

• Accounting-format, reconcilable future obligations’ records for downstream G/L, Risk or Credit applications

• Real-time

• Self-synchronizing DLT *

• High Performance

• Linearly Scalable *

• High-Capacity

• Interoperable with Legacy Infrastructure or other networks

• Implement at large or small scale

• No-code, asset/life-cycle configurable *

*U.S. Pat. No. 11,631,063 B2

APPENDIX ISSA SLIDES

Regulatory Details

United States

• Federal landscape

  • No unified “stablecoin law”; STABLE Act (House) and GENIUS Act (Senate) pending

  • Issuers rely on MSB/money-transmitter rules, Bank Secrecy Act, state-by-state licensing or bank charter

• Key constraints

  • Only depository institutions can self-issue

  • Nonbank issuers must partner with banks or register as money transmitters (meeting reserve and audit obligations)

• State regimes

  • New York BitLicense, Wyoming stablecoin law, etc.

  • 1:1 reserve requirements, licensing fees, periodic audits, capital/insurance minimums

  • Varying rules on redemption rights, eligible collateral, permissible APYs

BIS Report: https://www.bis.org/publ/arpdf/ar2025e3.pdf

European Union (MiCA)

• Effective June 2024 under Markets in Crypto-Assets Regulation

• Issuer obligations

  • Maintain 1:1 High-Quality Liquid Asset reserves

  • Guarantee daily redemptions at face value

  • Obtain an “electronic money token” (EMT) license under the e-money directive

• Ongoing duties

  • Monthly disclosures, strict AML/KYC, adverse-event reporting

  • Cross-border passporting across all 27 member states

United Kingdom

• E-money treatment under FCA’s Electronic Money Institution (EMI) regime

• Core requirements

  • Safeguard 100 percent of customer funds in ring-fenced accounts

  • Robust governance, conduct rules, and capital buffers

• Innovation hub

  • Temporary registration with lighter touch

  • Caps on AUM and geographic reach

Singapore

• Payment Services Act classifies stablecoins as “designated payment tokens”(DPTs)

• Major Payment Institution lice nse

  • 1:1 segregated reserves in MAS-licensed banks

  • Quarterly audits, stringent AML/CFT controls, local board representation

• Regional access via APEC and ASEAN passporting agreements

Hong Kong

• Stablecoin Bill (anticipated 2025)

• Licensing via HKMA as a stored-value facility

• Issuer duties

  • Reserve holdings in HQLA or on-demand bank deposits

  • HK$ redemptions within 24 hours

  • Monthly reports and independent proof-of-reserves

Switzerland

• FINMA classification: stablecoins are “payment tokens”

• Dual regimes

  • Payment system with multilateral settlement (for banking-level issuers)

  • Financial intermediary rules (lighter compliance, limited KYC/AML)

• Reserves calibrated to expected daily transaction volumes

Cayman Islands

• Virtual Asset Service Provider (VASP) Law

• Issuer requirements

  • Register as a VASP, maintain 100 percent backing, annual audits

  • Capital buffer tied to a percentage of AUM

• Redemption mechanism via contractual rights rather than on-shore guarantees

Dubai (DFSA)

• Crypto Tokens regime (since 2024)

• Tier 1 (banks, licensed custodians): unlimited issuance & market-making

• Tier 2 (fintechs): issuance caps based on AUM

• Both tiers require client asset segregation, 1:1 reserves, KYC/AML, monthly reporting

Bermuda

• Digital Asset Business Act

• Key rules

  • 100 percent backing held in segregated trust accounts

  • Oversight as a trust company, quarterly attestations

  • On-chain proof-of-reserves

Malaysia

• Securities Commission framework

• Only licensed banks or approved e-wallet operators may issue

• Must safeguard client funds, meet capital adequacy, conduct quarterly audits, and enforce KYC/AML

Interest on Stablecoins

• General prohibition on paying interest/yield directly in the token to avoid securities classification

• Permitted structures (some US states, Cayman)

  • Interest issued via separate contracts, no on-chain markup

  • Additional capital or surety to cover credit risk

• Platform requirements

  • US: broker-dealer or securities registration

  • EU/HK: asset management or specific yield-product licensing

• Transparency mandates: disclose NAV, lock-up periods, fees, counterparty exposures

• DeFi-style permissionless yield remains off-limits in regulated frameworks

Looking Ahead: Key Developments to Watch

• Global coordination on a unified stablecoin standard (BIS, FSB initiatives)

• Regulatory clarity around algorithmic and crypto-collateralized stablecoins

• Integration of programmable compliance features (on-chain audit trails, real-time reserve proofs)

• Convergence between stablecoins and retail CBDCs for cross-border interoperability.

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