Winklevoss Twins Receive Approval For Fiat-Backed Stablecoin by New York Regulator

Winklevoss Twins Receive Approval For Fiat-Backed Stablecoin by New York Regulator

The Winklevoss twins, formerly of Facebook fame but now more well-known as the founders of the cryptocurrency exchange Gemini, have now seemingly received approval from New York authorities to launch the ”Gemini dollar” stablecoin.

According to a Medium post published by Gemini, the Gemini dollar will be developed on the Ethereum network, will follow the ERC20 token standard, and will be pegged 1:1 to the US dollar.

Most notably, however, the cryptocurrency is the first regulated stablecoin to launch and has received a green light from the New York Department of Financial Services (NYDFS).

It should, however, be noted that the trust company Paxos announced a stablecoin approved by the same authority today as well, casting some doubt over whether Gemini is truly the first regulated stablecoin.

The underlying motivation for launching this stablecoin is supposedly that Gemini had recognized the growing differences between cryptocurrencies and the traditional banking system and fiat currencies.

Moreover, Gemini is heralding this first ”trusted and regulated digital representation of the US dollar” as something that will bridge ”the traditional banking system and the new, rapidly growing crypto economy”, providing linkage between the world of cryptocurrency and that of fiat currencies.

The cryptocurrency exchange also states that the US dollars required in order to correspond to the amount of Gemini dollars will be held at ”a bank located in the United States and eligible for FDIC ’pass-through’ deposit insurance”.

In addition to this, a public accountant company, unrelated to the Gemini dollar and acting independently, will undertake monthly examinations in order to control that the US dollar balance amounts to a 1:1 peg between the US fiat currency and the Gemini dollar.

As a measure towards ensuring transparency and openness, all the reports compiled by these independent accountants will be openly published on Gemini’s website.

Gemini also stresses that their stable coin has already been thoroughly audited and officially verified by a third-party security firm, and their report is also readily available for investors to review.

The Winklevoss twins have previously tried to get the SEC to approve a Bitcoin-based exchange-traded fund (ETF) and were most recently denied by the regulatory commission in July, something Toshi Times covered.

In an interview with Forbes, one of the twins – Tyler – stated that he hopes that the Gemini dollar will assist in solving issues associated with time delays between around-the-clock cryptocurrency markets and time-restricted fiat currency markets.

Trading of the Gemini dollar will commence today, on September 10th, at 10 AM ET. Users will then be able to either convert US dollars to Gemini dollars and subsequently withdraw these to a pertinent Ethereum address.

Image Source: “Flickr”

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