Why the Winklevoss Stablecoin is More Crucial Than a Bitcoin ETF

On Sept. 10, the Winklevoss twins and U.S.-based regulated crypto exchange Gemini released a stablecoin that could impact the market in a more profound way than a Bitcoin exchange-traded fund.

For many months, ever since the launch of Tether in 2017, the legitimacy of stablecoins in the global market has triggered a highly controversial debate.

Many investors in the crypto market have openly expressed their dissatisfaction with Tether, despite its audit result that demonstrated its holdings of over $2 billion in a Puerto Rican bank account.

"To date, there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies. Enter the Gemini dollar-a stable value coin that is issued by Gemini, 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. Further, the smart contracts underlying the Gemini dollar token have been fully audited and formally verified by an independent security firm."

The launch of a Bitcoin ETF is not as urgent as the release of a trusted, fully audited stablecoin that could bring more stability to the cryptocurrency market.

The existence of GUSD directly refutes the dismissal of the market based on an assumption that Tether is not legitimate, as the market will no longer depend on one dominant stablecoin.

ShapeShift CEO Erik Voorhees said that the launch of GUSD will lead to the integration of global finance with crypto finance, which is essential for the long-term growth of the market.

Previously, several Western Carolina University professors wrote that the volatility in the crypto market creates a more favorable ecosystem for institutions compared to individuals.

The cryptocurrency market, in its current state, is not stable enough to support many institutions and large-scale investors.

Efforts from companies like Coinbase and Gemini to institutionalize and improve the infrastructure of the market will create a regulated channel for institutions to enter and stabilize it, which will be beneficial for both institutions and individual users.