In a new blog post, cryptocurrency exchange Gemini announced the launch of its own stablecoin — Gemini dollar. The cryptocurrency is pegged to the US dollar 1:1 and designed as an ERC20 token. Cameron Winklevoss wrote in the post that they intend to bring fiat and cryptocurrency closer by creating a regulated and trustworthy US dollar equivalent in the crypto market. Several stablecoins exist in the market already, but none are regulated. Tether, which is also pegged to the US dollar, is one of the most controversial coins in crypto history.
What Led to the Stablecoin Creation?
Cameron Winklevoss explained their motivation behind the Gemini dollar in the post, saying:
“When fiat currency and cryptocurrency interact, the differences between the traditional banking system and cryptocurrencies become increasingly clear.”
He called fiat and crypto systems a “fundamental mismatch” and said that the links between both should be improved.
The Gemini dollar will be a “trusted and regulated” digital coin representing the US dollar. The coin will be issued by Gemini, which is a New York based trust company. Each coin will be pegged to the US dollar 1:1, i.e., the value of one US dollar will always be the value of the Gemini dollar.
Built on the Ethereum network, this ERC20 token will be traded under the ticker symbol GUSD. The blog claims that the coin will be under the regulation of the New York State Department of Financial Services (NYDFS) as Gemini is registered and regulated in the state of New York. The exchange also issued a white paper for the currency.
When Will Gemini Dollar Be Available?
The coin became available on Sept. 10 at 10 am ET. Users can log on to their Gemini accounts and convert US dollars to Gemini dollars. The coins can then be withdrawn to an Ethereum address. As soon as any USD is deposited into a Gemini account, it will be converted automatically to GUSD. The US dollar equivalents of the GUSD issued by the exchange will be maintained in a bank, located within the United States. The funds will be eligible for FDIC “pass-through” deposit insurance as well.
To ensure the 1:1 peg, a monthly audit of US dollar deposits will be analyzed by an independent registered public accounting firm. Gemini will publish all audit reports publicly. It also guarantees that the smart contracts underlying the GUSD token have been “fully audited and formally verified” by an independent security firm.
This step by the Gemini operators gives us a new Tether, sans the controversial elements of the coin. However, we must note that the Gemini dollar white paper isn’t exactly a detailed document filled with technical jargons or defining a vision of the future.