Monday, 14 Oct 2019
Business

New York State Approved The First Dollar-Based Cryptocurrencies

New York State has approved two digital currencies that are joined to the U.S. dollar and are classified as stablecoins. These cryptocurrencies avoid the price instability by being fixed to stable assets. The digital cryptocurrencies—Gemini Trust Company and Paxos Trust Company—are available to deal on their respective exchanges. It is a sign that shows digital currencies might be maturing.

New York State Approved The First Dollar-Based Cryptocurrencies

Gemini Trust Company is founded by the Winklevoss twins, who became famous with a lawsuit charging Mark Zuckerberg for taking the idea of Facebook from them. They have become important magnates in the cryptocurrency world. The currency works on the following mechanism: It is first fixed to the U.S. dollar on a one-to-one basis; then the company will hold the U.S. currency that will correspond with all issued Gemini dollars at a bank eligible for the FDIC’s pass-through insurance. Cameron Winklevoss said, “Till the date, there has been no faithful and balanced digital representation of the U.S. dollar that operates openly or in decentralized manner like cryptocurrencies.” He further stated that Gemini coin is the world’s first regulated stablecoin.

Speaking of cryptocurrency, recently Citigroup was in the news as it is the latest bank to offer crypto custody. It will recommend crypto custody solutions worth $175 Billion to the investors. With the launch of a product DAR (digital asset receipt), Citigroup will allow investors to pump their money in cryptocurrencies in a completely insured and balanced manner. A DAR is alike to ETFs (exchange-traded funds) as the investor is not mandated to own the asset or stock that is signified by DAR. Citigroup offers DARs that are based on foreign stocks. These DARs investors from the U.S. cannot purchase foreign stocks. Currently, Citigroup is in early stage in issuing DARs based on Bitcoin. This will improve the infrastructure and liquidity of the international crypto market.

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