Gemini has announced that it is launching a stablecoin pegged to the value of the US dollar.
In a press release this morning, the exchange founded by the Winklevoss twins published the news of the new exchange-backed token dubbed the “Gemini dollar”. The token has three fundamental characteristics, namely:
- it is issued by Gemini,
- it is strictly pegged 1:1 to the U.S. dollar, and
- it is built on the Ethereum network and operates under the ERC20 standard for tokens.
— Gemini (@GeminiDotCom) September 10, 2018
The announcement explains that the token aims to incorporate the “creditworthiness and price stability” of the US dollar. It hopes to use it to create a token based on blockchain technology. Gemini also stated that the new token is all above board and will remain under the oversight of regulatory authorities, especially the New York State Department of Financial Services (NYDFS).
Quick to get the token up, the exchange announced that Gemini users can convert U.S. dollars into Gemini dollars. This happens through users’ Gemini accounts and, from there, they can withdraw them to an Ethereum address specified.
Furthermore, the US dollars which are associated with the Gemini dollars (to be issued or already in circulation) will be held in a bank based in the US. The exchange explained that this particular bank is eligible for FDIC (or pass-through) deposit insurance which will be treated with any applicable limitations.
It was also explained that “the U.S dollar deposit balance will be examined monthly by an independent registered public accounting firm to verify the 1:1 peg… Further, the smart contracts underlying the Gemini dollar token have been fully audited and formally verified by an independent security firm, whose report is publicly available here.”