Gemini Dollar

Purpose and Utility

Gemini Dollar (GUSD) is a regulated stablecoin launched by the Gemini cryptocurrency exchange in 2018. It is designed to maintain a 1:1 peg with the US Dollar, with each GUSD token being backed by an equivalent amount of USD held in FDIC-insured bank accounts.

Business Model and Operations

The primary utility of GUSD is to serve as a stable medium of exchange and a bridge between traditional finance and cryptocurrency markets. Gemini maintains full reserves for all GUSD tokens in circulation, with regular attestations by independent accounting firms to verify the 1:1 backing. The stablecoin operates on the Ethereum blockchain as an ERC-20 token.

Real-World Adoption

GUSD has achieved notable adoption within the cryptocurrency ecosystem, particularly on the Gemini exchange and various DeFi platforms. As of 2024, it maintains a market presence with a circulation of approximately $700 million. The token is primarily used for trading, remittances, and as a stable store of value during market volatility.

Platform Development

Gemini actively maintains and updates the GUSD infrastructure, with regular security audits and compliance reviews. The development focus is primarily on maintaining stability and security rather than adding new features.

Token Distribution and Governance

GUSD tokens are minted when users deposit USD and burned when redeemed, maintaining the 1:1 peg. The system is centralized, with Gemini controlling the minting and burning process. This centralization, while limiting decentralization, ensures regulatory compliance and stability.