Regulated exchange issues 1:1 tethered ‘Gemini dollar’ stablecoin.
Cameron Winklevoss – who, alongside twin Tyler, is half of the brotherly partnership at the helm of the Gemini crypto exchange – has taken to Medium to announce plans to create a US Dollar-backed ‘stable’ cryptocurrency.
Dubbed the Gemini coin, it is part of what Cameron describes, in a subtle twist of the usual thinking on such matters, as Gemini’s efforts to five “fiat currency the same desirable technological qualities of cryptocurrencies.”
In a side-swipe at the much-maligned, much discussed, lightly audited Tether (USDT), Winklevoss then says “there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies.”
The Gemini dollar will indeed be unique, as its issuance by Gemini gives it de facto sign off from US regulators in the form of the New York State Department of Financial Services (NYDFS). It will be built upon Ethereum ERC20 standard, and thus be compatible with exisiting ETH wallets, and available as of September 10th under the ticker GUSD. The tokens can be automatically converted to fiat dollars when deposited in a Gemini account.
Addressing a matter that has been of concern regarding Tether, whether there were actually dollars backing up the issuance of its tokens, Winklevoss said that “U.S dollars that correspond to the Gemini dollars issued and in circulation will be held at a bank located in the United States and eligible for FDIC ‘pass-through’ deposit insurance… In addition, the U.S dollar deposit balance will be examined monthly by an independent registered public accounting firm to verify the 1:1 peg.”
Futher to this, “All Independent Accountants’ Reports will be publicly available here.”
The idea of the Gemini coin seems very similar to Circle’s plans to institute a similar dollar-backed crypto, announced earlier in the year, with the backing of mining giant Bitmain. That too will be comprised of an ERC20 token, but is currently still in development. An FAQ on Circle’s website says that it “expect[s] to release the service in the coming months.”
Also, by way of coincidence – or not, seeing as it is also regulated by the NYDFS – Paxos also announced launch of it’s own Paxos Standard stablecoin as the “world’s first regulated crypto asset”. Also pinned 1:1 to the U.S. dollar, it too is a ERC20 offering. Paxos stands as a qualified custodian of customer funds under its regulatory standards, so says that it offers “greater protections for customer assets than any other existing stablecoin.”
It will be available to existing and new customers using Paxos’ commodities and securities settlements platform via Paxos.com.
For Gemini, this is a big announcement, after a series of disappointments regarding its attempts to begin a crypto-driven Exchange Traded Fund. It also furthers Gemini’s embrace of regulation in the cryptocurrency space that has seen its founders consistently speak out in favour of falling into line with rule-makers and courting mainstream Wall Street backing. That has included encouraging players to band together to self-regulate.