Cryptocurrency exchange Gemini, which was founded by Cameron and Tyler Winklevoss, has announced the launch of the “Gemini Dollar” (GUSD), a dollar-backed stablecoin built on the Ethereum network according to the ERC20 standard for tokens.
The Gemini dollar aims to become a “trusted and regulated digital representation” of the U.S. dollar that can be transmitted across the blockchain and traded on cryptocurrency exchanges throughout the world.
We are excited to announce our launch of the Gemini dollar (GUSD), the world’s first regulated stablecoin! For more information, please visit our blogpost on @Medium https://t.co/O9jljzSljj
— Gemini (@GeminiDotCom) 10 September 2018
“To date, there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies,” Cameron Winklevoss wrote in the announcement. “The Gemini dollar (ticker symbol: 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).”
Starting today, users will be able to convert U.S. dollars in their Gemini account into GUSD and withdraw them to an Ethereum specified address. The Gemini dollars can also be automatically converted into U.S. dollars by depositing them into user’s Gemini account.
As outlined in the Gemini dollar white paper, GUSD is structured as an ERC-20 token on the Ethereum blockchain. The U.S dollars that correspond to GUSD issued and in circulation will be held at a bank located in the United States and eligible for Federal Deposit Insurance Corporation (FDIC) “pass-through” deposit insurance, subject to applicable limitations. 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.
Gemini say the exchange has enlisted an independent registered public accounting firm to publish monthly reports verifying that the tokens are fully-backed by USD and has also subjected the GUSD smart contracts to a full audit by an independent security firm.
According to MarketWatch, GUSD will be held by State Street Bank, and the deposit balance will be audited monthly by BPM Accounting and Consulting.
Anthony Pomplianao, Founder & Partner at Morgan Creek Digital, has commented on the launch of the Gemini dollar saying that “the market continues to mature.”
Winklevoss twins just announced a stablecoin backed by USD. The Ethereum-based token is:
– Approved by NY Department of Financial Services
– Dollars held in FDIC-insured State Street account
– Audited by multiple third-parties at various times
The market continues to mature.
— Pomp 🌪 (@APompliano) 10 September 2018
Gemini believes that GUSD will provide “a crucial link between the traditional banking system and the new, rapidly growing crypto economy,” and it will be interesting to see whether this new asset will be able to become a choice among Bitcoin traders and potentially replacing the controversial Tether (USDT) token.
Last month, several of the world’s largest cryptocurrency exchanges, including Bitstamp and Bittrex, has joined a Winlkevoss brothers’ initiative to create a self-regulatory organization in an effort to prevent fraud and manipulation in digital assets markets.
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