Winklevoss twins launch new stablecoin – the Gemini Dollar
Ever since stablecoins were initially discussed as a liquidity and risk protection solution within the cryptocurrency ecosystem, the race has been on to build this supposed ‘Holy Grail’ digital asset. The Winklevoss twins join the fray today with their own offering, the Gemini Dollar. Backed by key players within the New York financial system, news of its release has made waves within the space due to its 'best of both worlds' sales pitch.
On Monday morning, the Winklevoss-twins backed crypto exchange Gemini, announced that it would be releasing a US dollar backed stable coin hosted on the Ethereum network.
The token is designed to provide liquidity options for users wanting to send US dollar fiat back and forth via the Ethereum blockchain. The press release from the Gemini team indicated that the new digital asset would be ‘strictly’ pegged to the US dollar, with the Gemini trust company holding USD deposits corresponding one for one with Gemini dollars in circulation.
A major distinguishing factor, and selling point for the Gemini Dollar is its regulatory robustness. The New York Department of Financial Services (NYDFS) will directly supervise the operations of Gemini dollar, and be the regulatory authority of the projects.
To secure the fiat assets, Gemini will use State Street bank, with a pass-through insurance program implemented by the Federal Deposit Insurance Corporation (FDIC) set within specific limits. In addition, independent auditor BPM Accounting and Consulting, will audit Gemini’s bank holdings and issue public reports of its findings.
As noted in its whitepaper, the aim of the Gemini Dollar is to deliver a “solution that provides the security of an offline approval mechanism yet the flexibility of an online approval mechanism”. The supporting entities Gemini has secured, coupled with the size and technological capability of the Ethereum network, may put the platform in the best possible position to achieve this goal. Beginning today, Gemini users will be able to convert U.S. dollars in their Gemini account to Gemini dollars and withdraw them to an Ethereum address they specify.
Stablecoins have remained a blockchain ‘holy grail’, with a number of options besides the Gemini dollar having emerged in recent years. However, concerns remain about the authenticity and transparency of many of the existing stablecoins — issues that the Winklevoss offering appears to have addressed at its debut.
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