The Winklevoss-backed Gemini exchange launched the Gemini dollar, a regulated stablecoin that has received approval from the New York Department of Financial Services, the company announced in a September 10 press release.
Best of Both Worlds
The Winklevoss twins, owners of the Gemini exchange, announced that the company has launched the Gemini dollar – a stablecoin strictly pegged one for one to the U.S. dollar. In a Medium press release, Gemini explained that the Gemini dollar is built on the Ethereum network according to the ERC20 standard for tokens.
According to the company’s press release, the Gemini dollar (GUSD) combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of U.S. regulators, namely, the New York State Department of Financial Services (NYDFS).
“We are excited to bring the Gemini dollar to market and provide a crucial link between the traditional banking system and the new, rapidly growing crypto economy. With the Gemini dollar, we continue to deliver on our mission — to build the future of money — and help transform the global financial system to enable possibilities previously unimaginable,” the press release said.
Gemini users will be able to convert U.S. dollars in their Gemini account into Gemini dollars starting September 10. The users are also able to withdraw their Gemini dollars to an Ethereum address. The press release also added that users could convert Gemini dollars back into U.S. dollars by depositing them into their Gemini account.
What Sets the Gemini Dollar Apart
Tyler Winklevoss, Gemini CEO, and co-founder, said that a “network of trust” separates the Gemini dollar from similar stablecoins that have become popular throughout 2018. According to him, investing giant State Street will be holding onto the U.S. dollars in an FDIC-insured account, and multiple third-party audits will be conducted both before and after the launch.
In addition to that, independent auditor BPM Accounting and Consulting, will audit Gemini’s bank holdings and issue public reports of its findings.
“It’s not just Gemini Trust,” said Gemini CEO and co-founder Tyler Winklevoss. “But you have to build a network of important players that are also trusted to solve for the trust problem of a stablecoin.”
While Gemini has worked hard to address some of the most prevailing problems stablecoins face, namely authenticity, and transparency, the exchange now has a new set of problems to solve.
As stablecoins are created when the fiat currency it is tied to is deposited into an account, the bank that backed the Gemini dollar now needs to accept cash deposits. According to Forbes, representatives for the Boston-based State Street bank refused to comment on the matter.
While neither Tyler nor his brother, Cameron, would disclose whether they have any customers lined up to buy the tokens, they said potential customers include decentralized applications, or dapps, built on the ethereum blockchain, individual traders, and institutions who want to move value.