Gemini Dollar (GUSD)

1. Introduction

The Gemini dollar is a cryptographic token that is issued by a New York trust company, strictly pegged 1:1 to the U.S. dollar, and built on the Ethereum network according to the ERC20 standard for tokens. The Gemini dollar is a stable value coin that combines the creditworthiness and price stability of the U.S. dollar with the technological advantages of a cryptocurrency and the oversight of U.S. regulators. As an ERC20 compliant token, the Gemini dollar can be transferred on the Ethereum network. Gemini dollars are created at the time of withdrawal from the Gemini platform and redeemed or “destroyed” at the time of deposit into the Gemini platform.

2. Industry Pain Point

Cryptocurrencies have recently surged in popularity and investor interest. While they bear a promise perhaps as profound as the Internet itself, they suffer from substantial price volatility, thereby hindering their use as a medium of exchange and unit of account (two of the three functions of money). One proposed solution is the creation of a stable value coin (often called a “stablecoin”), whereby an issuer distributes a cryptographic token to customers in exchange for a specified fiat currency, like the U.S. dollar, at a fixed 1:1 exchange rate. Because the U.S. dollar is a highly desirable medium of exchange, as well as a globally accepted unit of account, it is a desirable peg for a stablecoin. Several implementations of fiat-pegged stablecoins have been proposed, however, they all lack some combination of supervision, transparency, and examination. As a result, doubts surrounding their solvency persist, as do concerns regarding the systemic risks they pose. What is needed is a stablecoin that people can trust. In this paper, we propose the Gemini dollar, a regulated stablecoin that combines the creditworthiness and price stability of the U.S. dollar with the technological advantages of a cryptocurrency and the oversight of U.S. regulators.

3. Useful Links