What Is the Gemini Dollar (GUSD)?

The Gemini dollar is a cryptographic token pegged (derived) 1:1 to the U.S. dollar and is built on the Ethereum network on the ERC20 standard. The Gemini dollar is a stable coin that combines the price stability and the creditworthiness of the U.S. dollar with the technological benefits of a cryptocurrency. Gemini dollars are created when anyone purchases something on the Gemini platform and then are redeemed or "destroyed" when they sell something on the Gemini platform.

The whitepaper states that the popularity of cryptocurrencies has recently risen, as has investor interest. While they carry as much promise as the internet, they are subject to significant price fluctuation, which limits their use as a medium of exchange. The establishment of a stable value coin (commonly referred to as a "stablecoin"), an issuer provides a token to consumers in exchange for a predetermined traditional currency. For example, at a fixed 1:1 exchange rate, the US dollar is one proposed solution. The US dollar is an ideal peg for a stablecoin since it is both an in-demand medium of exchange and a globally acknowledged unit of account. 

According to the platform, what is needed is a stablecoin that people can trust, for which the team proposes the Gemini dollar coin (GUSD). As the website states, each GUSD represents a US dollar held by Gemini in FDIC-insured bank accounts in the United States. Besides, the money market funds hold short-term US Treasury bonds and are held with a custodian. Users can trade and stake in DeFi using GUSD, and there are no costs associated with trading GUSD on the Gemini Exchange. The Gemini dollar can be transmitted on the Ethereum network since it is an ERC-20 compliant token. 

History of Gemini Dollar (GUSD)

Gemini is a New York trust company regulated by the New York State Department of Financial Services (NYSDFS). Gemini is also a qualified custodian and a fiduciary. Gemini is based on the principle of "security first" and the culture of seeking permission rather than forgiveness.