US approves Winklevoss dollar-linked cryptocurrencies

NEW YORK (AFP) – New York state regulators gave the green light on Monday to a pair of cryptocurrencies linked to the dollar, providing a boost of credibility to the ventures.

Cameron and Tyler Winklevoss and their Gemini Trust Company received authorisation along with Paxos Trust Company, after the companies agreed to adhere to New York rules on money laundering, anti-fraud and consumer protections, the New York State Department of Financial Services said.

The Winklevoss twins have said their Gemini dollar could provide a key link between cryptocurrencies and traditional money. The company plans to launch a programme that will allow consumers to convert US dollars into Gemini dollars.

“To date, there has been no trusted and regulated digital representation of the US dollar on the blockchain,” Tyler Winklevoss said.

“We are excited to bring the Gemini dollar to market, a stablecoin that combines the creditworthiness and price stability of the US dollar with blockchain technology and the oversight of the DFS.”

Entrepreneurs Cameron and Tyler Winklevoss in New York. – AFP

Approval in New York comes after the US Securities and Exchange Commission in July rejected a proposal from the Winklevoss brothers to allow trading in the first Bitcoin-based exchange-traded fund.

DFS superintendent US Maria Vullo said New York “is committed to fostering innovation while ensuring responsible growth” as financial markets evolve.

Chief executive of Paxos Charles Cascarilla said its venture would pave the way to “a truly frictionless, global economy” with a “digital asset that can be trusted”.

The SEC, which has been cracking down on some cryptocurrency ventures, on Sunday also took action against Bitcoin Tracker One and Ether Tracker One after the entities were described alternatively as “exchange traded funds,” “exchange traded notes” and “non-equity traded certificates”.

The SEC ordered a suspension of trading for the two entities, pointing to “confusion amongst market participants regarding these financial instruments.”