On September 10, 2018, the New York Department of Financial Services (NYDFS) simultaneously approved two stablecoins based on Ethereum, Gemini Dollar and Paxos Standard. Both of these stablecoins are encrypted digital currencies anchored 1:1 to the U.S. dollar. These two digital currencies will be regulated by the U.S. government, and account funds will be audited every month. If there is a problem with the account, the U.S. government can pass law enforcement means to perform operations such as freezing.
Gemini Dollar is the first cryptocurrency issued by Gemini Trust Company. It is a token issued through the Ethereum blockchain. It is backed by US dollars, with an anchor ratio of 1 GUSD = $1, and an independent certified public accountant The firm will review it monthly and publish the review report regularly, thus ensuring the stability of legal currency and the speed and borderless characteristics of cryptocurrency at the same time.

1. Project background

Gemini Dollar (GUSD) is an encrypted token issued by the New York Trust Company, strictly pegged to the U.S. dollar at a ratio of 1:1, and built on the Ethereum network according to the ERC20 standard.
Gemini Dollar (GUSD) is a stable value coin that combines the credibility and price stability of the U.S. dollar with the technical advantages of cryptocurrencies and the oversight of US regulators. As an ERC20 standard, Gemini Dollar (GUSD) can be transferred on the Ethereum network.
Gemini dollars are created upon withdrawal from the Gemini platform and are redeemed or "burned" upon deposit into the Gemini platform.

2. Issuer

Gemini Trust Company, LLC (Gemini), the issuer of GUSD, is a New York trust company. Gemini operates under the direct supervision and regulation of the New York State Department of Financial Services and complies with the New York Banking Law and other applicable U.S. laws and regulations. Gemini maintains the necessary licenses and registrations to legally issue Gemini Dollars.

3. Proof of Solvency

A desirable outcome of stablecoins is the convergence between the tokens issued and the dollars generated by exchanging them. The number of tokens issued and in circulation can be observed on the blockchain, however, verifying the underlying USD balance for proof-of-solvency requires review by a trusted party.
As a measure of assurance, we recommend that the Audit Committee of Gemini's Board of Directors engage an independent CPA firm to periodically review and certify the underlying dollar balances in accordance with the certification standards established by the American Institute of Certified Public Accountants.

4. Create, redeem and transfer

Simple and elegant mechanisms for creation and redemption are necessary to increase usability and encourage adoption. We do this by allowing Gemini customers to create and redeem Gemini dollars on the Gemini platform.
Gemini dollars are created upon exiting the Gemini platform. Gemini's customers can exchange USD for Gemini USD at a 1:1 rate by withdrawing Gemini USD from their Gemini account to any Ethereum address they specify. The Gemini USD amount is debited from the client's Gemini account balance upon withdrawal.
Gemini dollars are redeemed or "burned" when deposited into the Gemini platform. Gemini customers can exchange Gemini dollars at a 1:1 rate by depositing Gemini coins into their Gemini account. The U.S. dollar amount of Gemini USD is credited to the customer's Gemini account balance at the time of deposit.
The Gemini dollars can be transferred on the Ethereum network.

Related Links:

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