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Cryptocurrencies

New York regulator approves Gemini, Paxos dollar-pegged tokens

Tuesday 11 September 2018 | 11:05 AM CET

The State of New York has approved Gemini Trust Company’s and Paxos Trust Company’s dollar-linked digital currencies, according to Reuters.

The Gemini dollar by Gemini, the digital asset exchange launched by twins Cameron and Tyler Winklevoss, is a stablecoin that will allow users to send and receive US dollars on the Ethereum blockchain. It will be strictly pegged to the US dollar on a one-to-one basis. Paxos’ stablecoin, the Paxos Standard, will also be fully collateralized by the US dollar on a one-to-one basis.

Both coins are available on their respective exchanges. The stablecoin, any digital currency pegged to a stable asset, such as gold or the dollar, could serve as a hedge against the volatility.

Gemini said the US dollars that correspond to the Gemini dollars issued and in circulation will be held at a US bank and eligible for the Federal Deposit Insurance Corporation’s “pass-through” deposit insurance. This type of insurance covers the interests of owners or beneficiaries in a qualified fiduciary or custodial account.

In Paxos’ case, customers can purchase and redeem tokens directly through Paxos.com one to one with the dollar.

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