If you’re a user of the cryptocurrency exchange Gemini, you might have noticed that the website was down yesterday for “maintenance.” Well it seems as though the mystery has been resolved: the exchange is launching its own dollar-pegged cryptocurrency to be called the Gemini Dollar (GUSD).
The USD-pegged Ethereum token GUSD will be a stablecoin that traders can use as a means to exit a trade without cashing out to actual dollars. Given the uncertainty over Tether (USDT) and whether or not its currency is backed by actual dollars, GUSD hopes to dispel some of these concerns by creating a “trust and regulated digital representation” of the dollar. As per their announcement, the Gemini exchange has said:
“The Gemini dollar (ticker symbol: GUSD) combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of U.S. regulators, namely, the New York State Department of Financial Services (NYDFS).”
Currently, a growing number of companies have released their own stable-coins. However, what makes GUSD different is that it is approved by the New York State Department of Financial Services. Gemini itself is a New York trust company and GUSD arguably represents the most transparent stablecoin to date. While cryptocurrencies operate 24/7 and 7-days-a-week, bank deposits and transfers only operate during so-called “business hours.” This mismatch needs to be accounted for which is by Gemini has decided to combine the blockchain with fiat currency to produce their own stablecoin. The entire scope and future plans for the GUSD is outlined in a whitepaper produced by the Gemini Trust Company.
Gemini was founded by Camera and Tyler Winklevoss, one of the most influential Bitcoin investors in the crypto space and famous for their feud with Mark Zuckerberg during the early days of Facebook. Available in most of the United States and a few other select areas, their influence is vastly growing. Although the Winklevoss twins had their famous Bitcoin ETF recently rejected by the SEC, this has not stopped them from continuing their push to better the crypto space and make it more accessible. Ultimately, it seems that Gemini is positioning itself as a future Coinbase of sorts with expansions of fiat limitations for deposits as well as now operating in new jurisdictions.
The hope is for GUSD that it will soon be adopted as more than just a stablecoin for Gemini, but for other exchanges as well. Given Tether’s dubious reputation according to some, there is an argument to be made for this change. However, GUSD must first be rolled out successfully with Gemini so its future with other exchanges can be accessed more concretely.