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NEW YORK (Reuters) – New York State approved the dollar-linked digital currencies of Gemini Trust Company and Paxos Trust Company on Monday, the first stable banks to get the go-ahead from the region's regulator.
Gemini's Gemini Dollar, the digital asset exchange launched by Cameron and Tyler Winklevoss, is a solid foundation that will allow users to send and receive US dollars on the Ethereum blockchain. It will be strictly linked to the US dollar on an individual basis.
Paxos' stablecoin, the Paxos standard, will also be fully secured by the US dollar on an individual basis.
"These approvals demonstrate that businesses can create changes and stringent compliance standards within a strong regulatory framework that protects regulated entities and protects consumers," said Monday the Superintendent of Financial Services of the State of New York. , Maria Vullo.
Both coins are available on their respective stock markets on Mondays.
One of the disadvantages of crypto-currencies – digital tokens that use encryption techniques to secure transactions – is price volatility, which hampers payment methods or means of exchange.
The stable market – any digital currency attached to a stable asset, such as gold or the dollar – serves as a hedge against volatility.
"When we founded Gemini more than four years ago, our mission was simple: build a bridge to the future of money," wrote the Winklevoss twins in a blog on Monday. "At first, it involved securing and facilitating the purchase, sale and storage of cryptocurrencies."
While the cryptocurrencies operate 24 hours a day, the fiduciary currencies only work during specific opening hours, they noted. Until now, they said, no reliable and regulated digital representation of the dollar circulated in an open and decentralized manner like cryptocurrencies.
"Being able to transfer payments 24 hours a day, seven days a week and making payments in a dynamic way is still very difficult," Paxos CEO Chad Cascarilla said in an interview with Reuters.
Gemini stated that the US dollars corresponding to Gemini dollars issued and outstanding will be held in a US bank and eligible for deposit insurance from the Federal Deposit Insurance Corporation.
This type of insurance covers the interests of owners or beneficiaries in a trust account or qualified custody.
In the case of Paxos, customers can buy and redeem chips directly from Paxos.com with the dollar.
Investors who are trading digital assets through itBit or its ATM will also be able to cash in their digital assets instantly on Paxos Standard, Cascarilla said.
Paxos Standard will also be available for listing on other stock exchanges and will trade under the symbol PAX.
Reportage by Gertrude Chavez-Dreyfuss; Edited by Susan Thomas
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