Winklevoss to Patent Stablecoin Tech For Banks

The owners of the American cryptocurrency exchange Gemini Cameron and Tyler Winklevoss have received a number of patents in the United States for a system for issuing stablecoins by commercial banks.

Six patents issued between August 2019 and January 2020 for the Winklevoss intellectual property company describe a system similar to the stablecoin model already in use by Tether (USDT) and Gemini Dollar (GUSD). The model gives users the ability to directly exchange fiat currency for its digital equivalent.

The patent says that the system requires “trusted enterprises” responsible for the creation, exchange and destruction of tokens, as well as for ensuring reserves in fiat currency in the ratio 1: 1. At the same time, the trusted company may be the Gemini exchange itself, but “other types of trusted organizations (for example, banks, trusts, etc.) can also participate in the issue, administration, redemption and / or other management” of stablecoin.

One of the patents granted on January 21 describes the tools by which organizations such as banks can quickly and efficiently create and issue new tokens to users. Trusted organizations may also be allowed to charge users a “processing fee” when releasing stablecoins.

Patents also detail the means by which stablecoins can be used as collateral “in financial transactions performed using smart contracts.” Another patent assumes that dividends from securities and other similar instruments can be paid in stablecoin.

Given the technology applications described in the patents, the system may be licensed so that it can be used by banks and other financial institutions. In addition, it is not yet clear whether Gemini will use GUSD or other tokens based on the same technology.