Bitcoin Global News (BGN)
September 11, 2018 -- ADVFN Crypto NewsWire -- The Winklevoss
twins have done it again.
On Monday, it was announced that
they have been given regulatory approval to launch a Stablecoin
that is backed by fiat and supported by their existing Gemini
trading platform.
Perhaps, since this has come to
pass, there is actually something to be said for working within the
frameworks that United States regulators have provided for Crypto
projects, so far.
Before taking this as the sign that
the US government’s opinion on Crypto projects has shifted for the
benefit of the space, let’s pump the brakes for a
second.
In theory, we can say this is one
step in a direction that could be beneficial for the growth of the
Blockchain industry. In practice, not only has the Stablecoin had
no time to prove its use, it has only been regulated by New York
regulators, which means the overarching agencies like the SEC, have
expressed no opinion on the subject. As with any Crypto project
that does not have a current regulatory opinion behind it at the
national level, the risk remains that it could be hamstrung by
future regulations at any time.
In the interests of a fair analysis
of this offering, however, it is important to understand what the
twins are offering with what is being called the “Gemini dollar.”
To even begin to fully grasp this, it is reasonable to start with
Gemini’s mission, which is to “build a bridge to the future of
money.”
A Stablecoin, by definition, is a
currency that serves as an easy bridge between Crypto and fiat, due
to the fact that it is both a Cryptocurrency and a slightly
centralized currency, at the same time.
In other words, it is backed by a
traditional currency and yet able to function as a Cryptocurrency,
all at once. Because of this special form of existence, it is also
logical to call a Stablecoin less volatile than the average
Cryptocurrency, which is why Crypto funds like to use Stablecoins
as a hedge against some of the inherent risk in the
industry.
Now that we have gotten that out of
the way, we can move on to what is known about the Gemini dollar,
at this time. In truth, all of the existing information on the
project mainly comes from Gemini’s initial announcement and white
paper, as well as Cointelegraph’s reaction piece to their
announcement.
Gemini claims that their Stablecoin
will act as the very definition of what a Stablecoin should be: one
that is a secure, safely pegged, but digital version of a fiat
currency that moves as it it were a Cryptocurrency.
Up to now, only Tether has gained
enough traction to consistently perform with the market’s top
players, though many would call this project a scam, given its
colorful history.
The only logical way to tell if the
Gemini dollar is through watching it over time, as it is actively
traded on the traditional as well as the Crypto market. Until then,
it is nothing more than another promising Cryptocurrency with the
added benefit of being partially regulated in order to minimize a
significant element of its inherent risk.
By: BGN Editorial Staff
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