Crypto Exchange Gemini Launches NYDFS-Regulated Stablecoinbr>
Cryptocurrency exchange Gemini have received permission from New York Department of Financial Services (NYDFS) to create its own dollar-backed stablecoin.
Called Gemini dollar (GUSD), the stablecoin is structured as an ERC-20 token on the ethereum blockchain and will be pegged to the US dollar at 1:1. The US dollars that correspond to the Gemini dollars issued and in circulation will be held at a bank located in the US and eligible for Federal Deposit Insurance Corporation (FDIC) “pass-through” deposit insurance, subject to applicable limitations. In addition, the US dollar deposit balance will be examined monthly by an independent registered public accounting firm to verify the 1:1 peg.
“The Gemini dollar combines the creditworthiness and price stability of the US dollar with blockchain technology and the oversight of US regulators,” said Cameron Winklevoss, Co-Founder and President of Gemini. “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.”
According to the Gemini dollar whitepaper, GUSDs are created at the time of withdrawal from the Gemini platform and redeemed or “destroyed” at the time of deposit into the platform. Users will be able to convert USD into GUSD and deposit them in an ethereum address. Customers will also be able to automatically convert Gemini dollars into US dollars by depositing them into their Gemini accounts.
“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,” Winklevoss said.
In addition to Gemini, the NYDFS has also authorized blockchain startup Paxos to offer a price-stable cryptocurrency. As part of the approval of these new products, the regulator has established required conditions to ensure that each trust company maintains robust policies and procedures to address risks and apply New York’s strong standards and regulations regarding anti-money laundering, anti-fraud, and consumer protection measures.
“As the financial technology marketplace continues to evolve, New York is committed to fostering innovation while ensuring responsible growth,” said NYDFS Superintendent Maria T. Vullo. “These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework that safeguards regulated entities and protects consumers.”