New York State Approves Two Dollar-based Cryptocurrencies (engadget.com)

Today, New York approved the first digital currencies that are tied to the US dollar, called "stablecoins." From a report: These cryptocurrencies avoid the price volatility of their brethren by being pegged to stable assets. The digital currencies in question, from Gemini Trust Company and Paxos Trust Company, are available to trade on their respective exchanges. The Winklevoss twins, who rose to fame with a lawsuit suing Mark Zuckerberg for stealing the idea for Facebook from them, have become major players in the cryptocurrency world. They are behind Gemini Trust Company. The currency is pegged to the US dollar on a one-to-one basis; the company will hold US currency that corresponds with all issued Gemini dollars at a bank eligible for the FDIC's pass through insurance.

Comments

The point of this is what, exactly?

[kenh]

So say I want $10,000 in one of these Winklevoss crypto-currencies I give them $10,000 in cash, they deposit the $10,000 in a bank, and I have the ability to spend $10,000 as a crypto currency?

How do the Winklevoses cover operating expenses? Am I paying a fee on top of my $10,000? Are the people I give these crypto coins to accepting less than 100 pennies for each crypto coin I give them?

How is this different from a pre-paid debit card?