Tyler and Cameron Winklevoss aren't letting rejections from the SEC or the sharp downturn in the price of bitcoin this year stop them from launching a new cryptocurrency product.
Their digital exchange, Gemini Trust Company, on Monday unveiled the Gemini dollar, a regulated stablecoin that will allow people to send and receive U.S. dollars on the Ethereum cryptocurrency network. The Gemini dollar, which has received approval from the New York Department of Financial Services, aims to maintain a value one on one with the U.S. dollar.
The idea is to bridge the gap between the traditional banking system and the cryptocurrency market. While many people have bought digital currencies as investments, they don't use them to buy and sell goods. This latest move allows people to convert their U.S. dollars into Gemini dollars, and the reverse, and move capital around the world. The Gemini dollars will be deposited in a U.S. bank, State Street.
"It is really a matter of bringing your US dollars on to the blockchain and making them borderless 24/7," Tyler Winklevoss told CNBC over the phone.
A State Street representative declined to comment.
Winklevoss says bitcoin is similar to gold in that it has been used as a store of value, versus a means of payment.
"If something is a good store of value, you don't want to spend it," said Winklevoss.
Plus, the volatile nature of cryptocurrencies, as witnessed most recently this year, has limited their appeal and raised the risks of using them as a payment method.
So far in 2018, bitcoin has lost 53 percent, according to CoinDesk.
"If you buy something with bitcoin or ether you could be dramatically under or overpaying." says Winklevoss.
The new coin rollout comes weeks after the Winklevoss firm's bid to list a first-ever bitcoin exchange traded fund received its second rejection by the Securities and Exchange Commission.
Volatility is one of the crucial challenges facing digital currencies as they try to find mass acceptance as a payment method. Interest has been slowly growing in fixed-price cryptocurrencies called stablecoins, which are pegged to a stable asset like gold or currency.
Tether is currently the largest such coin, but it has faced criticism.
Michael Moro, the chief executive officer of Genesis Global Trading, says his firm doesn't have exposure to stable coins yet. "Right now they're purely used on exchanges (arbitrage or crypto-to-crypto trading), but I think their potential use cases are much greater than just that," said Moro to CNBC.
Winklevoss argues the stablecoins on the market until now had issues with transparency and oversight.
"I don't think any of the offerings do adequate job in solving the trust problem. This [Gemini dollar] is the world's first regulated stablecoin," said Winklevoss.
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