New York regulators have given the green light to Tyler and Cameron Winklevoss’ first cryptocurrency, a stablecoin attached to their trading platform Gemini.
Solving Stablecoin ‘Trust Problems’
As Forbes reports on September 10, the token, the Gemini Dollar, will have the backing of investment bank State Street, which takes custody of the fiat dollars it is backed by.
Speaking to the publication, Tyler Winklevoss appeared to stress the level of trust the stablecoin will offer, based on its backing and State Street’s involvement.
“It’s not just Gemini Trust,” he said. “But you have to build a network of important players that are also trusted to solve for the trust problem of a stablecoin.”
The Gemini dollar thus becomes one of the world’s only regulated stablecoins, following the release of a stablecoin by Lichtenstein bank Union Bank last month.
Commentators Split On ‘Interest’
Commenting on its decision to approve the asset, New York Department of Financial Services superintendent Maria Vullo complimented Gemini’s setup:
These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework that safeguards regulated entities and protects consumers.
So too did the first reactions to the move, blockchain technologist Preston Byrne adding the know-your-customer (KYC) aspect of the asset will form a focus of interest.
“The Winklevoss brothers have always structured their affairs for the long run – lawyer-heavy, slow-and-steady-wins-the-race approach. Their stablecoin will be interesting to check out, particularly its KYC properties,” he wrote on Twitter.
The Winklevosses have continued to have a difficult ride with US regulators of late, their bid to launch a Bitcoin exchange-traded fund (ETF) failing to gain the approval of the Securities and Exchange Commission (SEC) for a second time in July.
Also voicing caution about the Gemini dollar was CoinShares strategist and regular media commentator Meltdem Demirors, who likened its issuance to an analog of extant asset Tether.
so basically we have more tether? feel like USD-collateralized stablecoins are only marginally interesting at best. there are dozens of efforts under way, and i don’t see natural demand for these assets. hope this makes them $$$, because it sounds like it was expensive to print! https://t.co/EFMnxy1LAg
— Meltem Demirors (@Melt_Dem) September 10, 2018
“[F]eel like USD-collateralized stablecoins are only marginally interesting at best,” she added in a tweet. “[T]here are dozens of efforts under way, and [I] don’t see natural demand for these assets.”
What do you think about the Gemini dollar? Let us know in the comments below!
Images courtesy of Shutterstock, Twitter.