Gemini will soon release the Gemini Dollar (GUSD), and much has been said on the stablecoin, especially on the provision that allows it to freeze any user account, if it feels it’s the right thing to do.
The new Gemini dollars, created by the Winklevoss brothers, will go a long way to regularize cryptocurrencies as a mainstream asset class.
The news filtered some few days ago, stating that the New York authorities have granted Gemini the right to launch the “Gemini dollar” stablecoin. The new Gemini dollar will be developed on Ethereum blockchain network and will follow the ERC20 token standard which will be pegged 1:1 to the U.S. dollars.
The stablecoin will go down in history as the first to receive the go-ahead from the New York Department of Financial Services (NYDFS).
The firm behind the new coin stressed that it hoped the GUSD would assist in solving issues associated with time delays between around-the-clock cryptocurrency markets and time-restricted fiat currency markets.
However, some experts are worried about the clause that allows Gemini to freeze users account at will; they stressed that the process is not associated with the doctrine of decentralization.
GUSD uses an ERC20 proxy contract that gives Gemini, as the custodian, the ability to upgrade the contract once every 48 hours, giving it among a myriad of other things the power to simultaneously render all tokens non-transferable.
The firm is of the view that, since the coin is pegged to the dollar, it should exist alongside and within the mainstream finance and not the other way round which must have some elements of oversights.
As outlined by the projects whitepaper, it reads,
“Desirable outcomes in a system that relies (at least in part) on trust requires oversight. In the context of a stablecoin, we submit that the issuer must be licensed and subject to regulatory supervision. From this, transparency and examination become requirements of the system, ensuring its integrity and engendering market confidence…. Gemini operates under the direct supervision and regulatory authority of the New York State Department of Financial Services and is subject to the New York Banking Law and other applicable U.S. laws and regulations.”
Though the regulation does not move crypto enthusiasts, most believe that it is a corrupt bargain and not to be trusted in any way.