Cameron and Tyler Winklevoss just announced the creation of a USD-pegged Ethereum-based stablecoin cryptocoin, the Gemini Dollar, by their cryptocurrency exchange, Gemini.
Starting today, September 10, 2018 at 10am ET, Gemini customers will be able to convert U.S. dollars in their Gemini account into Gemini dollars and withdraw them to any Ethereum address they specify. They’ll also be able to automatically convert Gemini dollars into U.S. dollars by depositing them into their Gemini account.
Cameron Winklevoss describes the coin:
“To date, there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies. Enter the Gemini dollar . . . 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)”
“The Gemini dollar is a cryptographic token that is issued by a New York trust company, strictly pegged 1:1 to the U.S. dollar, and built on the Ethereum [blockchain] network according to the ERC20 standard for tokens.”
Two competitors to the Gemini Dollar will probably suffer as a result. Hong Kong-based Tether had been leading the way toward developing stablecoins, swapping $2.7 billion worth of fiat into Tether tokens; Circle is another stablecoin developer, launching its Ethereum-based USD Coin; and Vancouver-based Stably’s StableUSD is another fiat-pinned “stablecoin“ cryptocurrency.
We recently discussed stablecoins on NEWconomy but the gist of it is that volatile fiat currencies have historically pegged their currencies on the US Dollar in order to protect against hyperinflation. Since cryptocoins are reliably volatile, cryptocoins pegged to stable fiat currencies might create a coin that will be stable and reliable enough to attract Wall Street and other blue chip investors. Attracting institutional money is a White Whale, the Grail, of the new economy.Leave a comment