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Tyler and Cameron Winklevoss have obtained the approval of the US regulator for a cryptocurrency in dollars.
The New York Department of Financial Services (NYDFS), a regulator of Wall Street, turned on the Winklevoss application for the so-called stablecoin on Monday morning. Virtual tokens are designed to contain a fixed value; in this case, they are nailed to the value of the US dollar.
The Winklevoss twins have worked on the offer through their exchange of cryptocurrency, Gemini, for more than a year, they said Fortuna to a call. With the blessing of the NYDFS insured, they intend to make the stablecoin immediately available, they said.
"Unlike American equities that could trade from 9 to 4, five days a week, this is a 24-7-365 asset class," said Cameron, president and co-founder of Gemini, referring to the markets of all hours of cryptocurrency. He compared development to the transition of the world from ordinary mail to electronic mail.
The new stablecoin, said Cameron, "is indeed a way to connect the world to the world of digital resources and allow the fiat currency to move on a blockchain. Similarly, digital resources move."
State Street, the century-old financial services company based in Boston, is ready to provide support for the stablecoin, called the Gemini Dollar, with cash reserves from one to one, documents obtained from indicate fortune . The auditor is set to be BPM, an accounting firm based in California
In addition to Gemini Dollar, NYDFS has granted his blessing to a stablecoin created by Paxos, the trust company behind ItBit, a cryptocurrency exchange online. That's called Paxos Standard, and it's set up to be controlled by Withum, an accounting firm based in New Jersey.
The NYDFS decision to approve the stablecoin represents another step in the mainstream for the cryptocurrency industry, which is best known for unpredictable price fluctuations and legal uncertainties. For example, the price of Bitcoin has plummeted by about two-thirds since the historical highs close to $ 20,000 for Bitcoin in December, and regulators continue to reject Bitcoin's ETF applications.
"As the financial technology market continues to evolve, New York is committed to fostering innovation while ensuring responsible growth," said Maria T. Vullo, superintendent of the NYDFS, in a statement. "These approvals show that companies can create changes and strong compliance standards within a robust regulatory framework that safeguards regulated entities and protects consumers."
Today the most popular stablecoin is Tether, a controversial token operated by Tether Limited, an out-of-earth society that critics say it operates too opaque. The company behind the token has faced charges of price manipulation, and its relationship with an auditor has broken at the start of this year. (He later used a law firm to track his accounts.)
"A stable stable must solve the problem of trust," said Tyler, CEO and co-founder of Gemini, in a phone call with Fortune . "Regulatory oversight ensures we are doing what we say we are doing."
Gemini Dollar and Paxos Standard are both tokens compatible with ERC-20, which means they were built to run on Ethereum, the second-most valuable cryptocurrency network alongside Bitcoin.
A number of other companies are also trying to develop cryptocurrencies anchored in legal currencies. IBM is testing a stablecoin on Stellar, a public blockchain. Bitmain, a Chinese mining giant from Bitcoin, is exploring the stablecoin together with a strategic partner, Circle, one of the most valuable cryptocurrency startups in the United States. Basis, another startup, has raised $ 133 million from Bain Capital Ventures and other investors to create an algorithmically managed stablecoin at the start of this year.
While Bitcoin has found a home as a store of value – a sort of digital gold – and a tool of speculation, the stablecoins aim to provide a reliable means of exchange for making payments and exchanges. As more stablecoins enter the market, they can help offset the disparities in price between global exchanges, lawyers argue.
"We think the obvious case of initial use is for professional market makers who use it to help them referee," said Cameron of Twin Dollar. Tokens could be used to power various decentralized apps along the line, he said.
