US-based cryptocurrency exchange Gemini Trust Company disclosed on Monday that it is launching a dollar-backed stable value coin (often called a “stablecoin”).
The stable value coin will provide liquidity for clients to send and receive U.S. dollars on the Ethereum network, It will be “strictly pegged” to the dollar, with the Gemini Trust Company holding USD deposits corresponding to the number of tokens in circulation.
According to a press release, the Gemini dollar, an ERC20 token with the ticker symbol, GUSD is strictly pegged 1:1 to the U.S. dollar, with the Gemini Trust Company holding USD deposits corresponding to the number of tokens in circulation.
The Gemini dollar [GUSD], touted as the world first regulated stablecoin combines the prices stability and also creditworthiness of the United States dollar with the blockchain technology. It has the oversight of the U.S. financial regulator, namely the New York Department of Financial Services (NYDFS).
According to the press release statement, the NYDFS has approved Gemini to issue the Gemini dollar, more so, the U.S. dollars that correspond to the Gemini dollars issued and in circulation will be held at a US bank and will be eligible for FDIC “pass-through” deposit insurance, subject to applicable limitations.
Furthermore, the deposited U.S. dollar balance will be examined every month by an accredited public accounting firm or auditor to verify the 1:1 peg. All Independent Accountants’ Reports will be made publicly available.
Tyler Winklevoss, Gemini co-founder said in the release that, the Gemini dollar is part of the exchange’s mission to build the future of money. It is the missing link between the traditional banking system and the crypto economy,” he added.
From September 10, 2018, Gemini customers will be able to convert the USD into Gemini dollars and deposit them in an Ethereum address. Also, customers can convert their tokens back into U.S. dollars by depositing them into their Gemini accounts.
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.