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New York governors gave the Winklevoss twins the go-ahead to launch their stablecoin. This development is widely regarded as an important step in the sector as it will facilitate the entry of new capital into the ecosystem.
Starting Monday, September 10, 2018, users will be able to convert US dollars into their Gemini Dollars in Gemini Dollars (GUSD) and withdraw them to any Ethereum addresses specified by the user.
GUSD will benefit from FDIC deposit insurance, albeit indirectly. Users can also convert GUSD to USD by depositing it in their Gemini account.
The Gemini Dollar must be pegged 1: 1 against the US Dollar
According to a Gemini blog post, the Gemini dollar has been pegged 1: 1 against the US dollar and will become the first regulated stablecoin in the world.
Stablecoin will allow users to send and receive US dollars on the ethereum network, using ERC20 tokens.
Just last month, Tyler Winklevoss, co-founder and CEO of Gemini Trust spoke in an interview about the long road to the release of his product and the drive for the company to do everything from the book .
During the interview, the Winklevoss twins have revealed that Gemini has
He added that it would not be just the trust of Gemini, a network of important players that you must trust must be available for provide the stability part of the stablecoin.
The approval was granted by the New York Department of Financial Services (NYDFS). Superintendent Maria T. Vullo of NYDFS commented that New York is committed to supporting innovation while the FinTech sector continues to grow.
NYDFS added that it set a few conditions to ensure that the trust company imposes strict Know Your Customer standards to prevent money laundering and fraud and consumer protection measures
Gemini promises that the dollar American will be held by State Street. BPM Accounting and Consulting has been appointed to balance and control the account every month.
Gemini, in his blog post, added that the GUSD was designed to combine credit worthiness and price stability of the US dollar with blockchain technology. The regulators who watch will make sure that things are done correctly.
Paxos also gets green light
Gemini Trust was not the only company to get the green light from the authorities. Paxos also received a nod from the NYDFS to launch his stablecoin anchored 1: 1 to the US dollar.
Paxos, the parent company of over-the-counter (OTC) exchange Bit has also released its stablecoin, Paxos Standard (PAX).
Paxos will allow users to purchase and redeem tokens directly via Paxos.com. The company added that investors who use their exchange or OTC platform can instantly redeem their cryptographic holdings for Paxos Standard.
The company added that it will work with an independent independent public accounting company each month to verify and ensure that PAX tokens are backed entirely by actual US dollars.
The NYFDS has confirmed that both Gemini Trust and Paxos will be subject to revocation of the charter in case they do not comply with the provisions provided to them by the agency.
The controversy surrounding Tether's OTD currency has questioned the credibility of the stablecoin after the allegations emerged from the fact that the USDT is not fully supported by the US dollar puts further pressure on trust of Gemini and Paxos to perform transparently.
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