New York state has approved two ‘stablecoins’, digital currencies which will have their value pegged directly to the dollar.
The Gemini dollar, launched by the entrepreneur twins Cameron and Tyler Winklevoss, will allow users to send and receive US dollars using the ethereum blockchain. The Paxos standard, created by the startup Paxos, will be collateralised to the dollar on a one-to-one basis.
Both coins are now available of their respective exchanges. They are designed to resist the volatility that has plagued many cryptocurrencies – digital tokens which are transferred through encrypted transactions – because unlike others, their value will be pegged to a stable asset as a hedge.
New York state department of financial services superintendent Maria Vullo said in a statement: “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 Gemini dollar will be hosted on the Winklevoss’s Gemini exchange, while the Paxos standard will be available from the company’s website.
Writing in a blog on Monday, the Winklevoss twins said: “When we founded Gemini over four years ago, our mission was simple: build a bridge to the future of money. As a first step, this meant making it safe and easy to buy, sell, and store cryptocurrencies.”
They suggested their platforms offers the first trusted and regulated digital representation of the dollar – one that can be traded 24 hours a day.
Paxos chief executive Chad Cascarilla sounded caution about the possibility of 24-hour payments.
“Being able to move payments 24 hours a day, seven days a week and make payments programmable in a dynamic way is still very difficult,” he said.