New York Paves Way for Digital Currencies Directly Linked To The US Dollar

By cellanr via Wikimedia Commons

The state of New York has approved two ‘stablecoins’ or digital currencies which will have their value linked directly to the US dollar.

The Gemini dollar was launched by Cameron and Tyler Winklevoss, the entrepreneur twins. It will enable users to receive and send US dollars using the ethereum blockchain. On the other hand, the Paxos standard was created by Paxos, a startup. It will be collateralised to the dollar on a one-to-one basis.

Both coins are now made available on their respective exchanges. They are aimed to resist the volatility that has plagued most cryptocurrencies or the digital tokens which are transferred via encrypted transactions. Unlike the others, their value will be linked to a stable asset as a hedge.

In a statement, Maria Vullo, the superintendent of the New York state department of financial services, stated: “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 Paxos standard will be available from the website the company while the Gemini dollar will be hosted on the Gemini exchange of the Winklevoss twins.

In a blog post that was published on Monday, the Winklevoss twins stated: “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.”

The twins suggested that their platform offers the first regulated and trusted digital representation of the dollar. They said that it is one that can be traded 24 hours a day.

On the other hand, Chad Cascarilla, the chief executive of Paxos, expressed a warning regarding the possibility of 24-hour payments.

He stated: “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.”