Winkelvoss twins launch first regulated stablecoin – so does Paxos
The Winklevoss twins, founders of Gemini – the cryptocurrency trading platform, were granted permission from New York state regulators to launch a dollar-backed stablecoin.
Cameron, brother of Tyler, wrote on Gemini’s Medium blog on Monday that the New York Department of Financial Services had approved the twins’ so-called Gemini dollar.
The stablecoin, Cameron said, is backed by dollars that are held at a bank located in the US and eligible for Federal Deposit Insurance Corporation “pass-through”, subject to applicable limitations.
He called the launch the “next step in our mission” to address the fundamental mismatch between fiat currencies, which only operate during weekly business hours, and cryptocurrencies that operate 24/7, 365 days a year.
“We must improve the linkage between these worlds by giving fiat currency the same desirable technological qualities of cryptocurrencies,” Cameron said.
He added: “Enter the Gemini dollar, which combines the creditworthiness and price stability of the US dollar with blockchain technology and the oversight of US regulators.”
The approval of the Gemini dollar will come as a welcome relief to the Winklevoss twins following the recent rejection of their applications to list two bitcoin-related exchange-traded funds by the Securities and Exchange Commission.
Trust company Paxos launched its own stablecoin on Monday – the Paxos Standard, also fully collateralised by dollars – that was also approved and regulated by the New York State Department of Financial Services.
“We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy,” said Charles Cascarilla, co-founder and chief executive on a blog post.
World’s first – and second
Both Gemini and Paxos claimed on their respective blogs to have launched the “world’s first” fully-regulated crypto asset.
Maria T. Vullo NYDFS superintendent told Forbes: “These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework.”