Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has announced the creation of a USD-pegged Ethereum token that looks to supplant tether (USDT) as the stablecoin of choice among bitcoin traders.

Gemini Launches Tether Competitor

Announced on Monday, the Gemini dollar (GUSD) aims to become what the controversial tether token has not, a “trusted and regulated digital representation” of the U.S. dollar that can be transmitted across the blockchain and traded on cryptocurrency exchanges located throughout the world.

“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,” Gemini wrote in the announcement, which was attributed to Cameron Winklevoss. “The Gemini dollar (ticker symbol: GUSD) combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of U.S. regulators, namely, the New York State Department of Financial Services (NYDFS).”

As outlined in the Gemini dollar whitepaper, GUSD is structured as an ERC-20 token on the Ethereum blockchain. Gemini users can acquire GUSD by depositing USD into their exchange accounts and then converting them into tokens, which can then be withdrawn to any Ethereum address. Similarly, users can exchange GUSD for physical dollars from within their Gemini accounts.

Gemini joins a growing stable of companies that have released cryptocurrency tokens purportedly pegged to the dollar or other fiat currencies. The most widely-used stablecoin is tether, whose eponymous issuer has been criticized for its opaque operations and close association with crypto exchange Bitfinex.

Critics have also alleged that USDT is not fully-backed by USD, though an investigation conducted by a U.S. law firm in June found that — at least at that particular time — Tether was holding more than enough USD in Puerto Rican bank accounts to cover the outstanding USDT.

Tether is currently the eighth-largest cryptocurrency, with a circulating market cap of just under $2.8 billion. Only bitcoin has more daily trading volume than USDT, owing to the fact that the token serves as a USD proxy on the vast majority of exchanges that cannot offer trading directly against the greenback.

GUSD to be Audited, Eligible for FDIC Insurance

In a statement, Tyler Winklevoss said that no other dollar-pegged token is sufficiently regulated and transparent to fulfill the true potential of a stablecoin.

“To date, there has been no trusted and regulated digital representation of the U.S. dollar on the blockchain. We are excited to bring the Gemini dollar to market, a stablecoin that combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of the NYDFS.”

Gemini’s website provides further information on what exactly that means. Significantly, the USD backing the tokens will not only be custodied by a U.S. bank but will also be eligible for “pass through” insurance from the Federal Deposit Insurance Corporation (FDIC).

Moreover, Gemini has enlisted an independent registered public accounting firm to publish monthly reports verifying that the tokens are fully-backed by USD and has also subjected the GUSD smart contracts to a rigorous audit by an independent security firm.