Market update: Winklevoss Brothers of Gemini launch USD backed Ethereum token: Price action muted
|- The Gemini Dollar is backed by the U.S. Dollar and operates on the principle of trust unlike most stablecoins in the market.
- Regular audit of the Gemini Dollar will be carried out every month by BPM audit.
Forbes reported today that the New York Department of Financial Services said yes to a proposal from Gemini Trust. The approved proposal gives the crypto exchange company the mandate to create and issue a token backed by the U.S. dollar.
The Ethereum based token being launched today is referred to as Gemini Dollar. The token will have various inherent features such as stability (similar to that of fiat), speed and not limited by borders (like digital assets). The Gemini dollar is not a store of value in the measure of virtual currencies like Bitcoin Litecoin and Ethereum but it will contain a similar value to the USD.
Moreover, the token is not your regular stablecoin due to the “network of trust” circumventing it. The CEO and co-founder Tyler Winklevoss of Gemini said in a comment:
“It’s not just Gemini Trust.” He added, “But you have to build a network of important players that are also trusted to solve for the trust problem of a stablecoin.”
Regular audit of the Gemini Dollar will be carried out every month by BPM audit. These audits will ensure that every Gemini Dollar has the backing of a US dollar. The deposits will be conducted by State Street bank but will not take custody of the token.
Market Update
At the time of writing, there has not been a price reaction in the market in the wake of the above launch. Bitcoin is balancing at $6,300 following a 1.05% rise in value on the day. Ethereum is trading at $195 after dropping from $202.56 (intraday highs). Ripple, on the other hand, is limited below $0.30 while currently trading at $0.27. Most of the digital assets are correcting higher, although by small margins.
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