One of the things that is stopping cryptocurrencies from being utilized in daily transactions is its volatility. Can you imagine businesses losing money due to the erratic price swings of cryptocurrencies? For this reason, there have been many attempts to make stable coins.
Cameron and Tyler Winklevoss recently succeeded in getting a new cryptocurrency pegged to the US dollar approved. It is called the Gemini dollar. It acts like a cryptocurrency allowing users to trade dollars on blockchain-based networks. It maintains a one-to-one parity with the US dollar.
The aim of the Gemini dollar is to make it practical to buy goods using digital currencies. It is among the first to win the approval of New York’s Department of Financial Services. Tyler Winklevoss mentioned that “If you buy something with bitcoin or ether you could be dramatically under or overpaying”.
In an interview, Tyler Winklevoss mentioned that the company has already been thinking regarding the launch of a stable coin for more than a year already. The lengthy process included a lot of due diligence and in-person meetings.
What Winklevoss twins want to achieve is to alleviate the volatility within the niche. According to Tyler Winklevoss, “The Gemini dollar is part of our mission to build the future of money”. He also added that “it is the missing link between the traditional banking system and the crypto economy”.
Paxos Trust Company’s stablecoin product has also been regulated on Monday. DFS Superintendent Maria T. Vullo mentioned that “As the financial technology marketplace continues to evolve, New York is committed to fostering innovation while ensuring responsible growth. 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”.
The DFS ensured that there are conditions that has to be met before these products have been approved. Standards including anti-money laundering, anti-fraud, and consumer protection measures were ensured by the agency.
Recently, US Securities and Exchange Commission halted two crypto-related products namely Bitcoin Tracker One and Ether Tracker One. The reason behind this is to avoid confusion within the market. Could this be a sign that there will be a Bitcoin ETF soon? The agency is set to make a decision regarding the Bitcoin ETF application of Solid X and Van Eck within the month.
Prior to this, the Winklevoss twins submitted their Bitcoin ETF application for the second time around only to be rejected yet again. The agency cited the possibility of price manipulation. The same goes for the next nine Bitcoin ETF applications.
There are a lot of questions still when it comes to stablecoins. Tether, the world’s most famous stablecoin, is still under scrutiny within the community for possible price manipulation. It hasn’t satisfied the entire market that it is 100% backed by the US dollar. As for the Gemini dollar, Tyler Winklevoss said that “We wanted to create a network of trust around the stablecoin”. He added that “All three (Gemini, State Street, and BPM) have regulatory oversight”.
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