APR 05, 2023
Adding More Transparency to the Reserves Backing Gemini Dollar (GUSD)
Transparency is central to trust in the crypto industry. We built the Gemini Trust Center to lean in on transparency, offering users visibility into the funds we hold on the Gemini platform and on users’ behalf.
Today, we’re pleased to highlight more details on the reserves backing Gemini dollar (GUSD), our U.S. dollar-backed stablecoin. On the Trust Center, we now offer a full breakdown of the U.S. Treasury Obligations backing GUSD, including CUSIP numbers, maturity dates, weighted average maturity, and total market value of funds.
All Treasury Obligations Backing GUSD Are Short-Term (< 3 Months)
Gemini Trust Company, LLC is a fiduciary and qualified custodian under the New York Banking Law and is chartered by the New York State Department of Financial Services (NYDFS) as a limited purpose trust company. As such, GUSD has also been regulated by NYDFS since it was first minted in 2018, making it one of the world’s first regulated stablecoins.
To provide 24/7 USD to GUSD conversions and vice versa, we ensure redeemability, segregation of reserves from proprietary assets, and reserve transparency.
Further, to minimize “duration risk” on our portfolio in the current interest rate environment, we only hold Treasury Bills, as opposed to Notes or Bonds. Treasury Bills, or T-Bills, are short-term obligations of the U.S. Government that, by definition, mature in one year or less. Importantly, we further restrict the maturity on any individual T-Bill position to a maximum of three months in accordance with NYDFS guidance.
GUSD Is Backed By Highly Liquid and Diversified Assets
Gemini ensures that GUSD is backed by cash and cash equivalents on a 1:1 basis, and these reserves are attested to by an independent registered accounting firm on a monthly basis and are made publicly available. You can view GUSD attestations here.
To ensure such reliability, we carefully construct the GUSD reserve with low risk assets, including T-Bills, government money-market funds, and cash deposits at FDIC-insured, regulated banks. These types of assets are generally understood to be among the safest investments.
The composition of assets that are eligible to be part of the GUSD reserve is determined by Gemini in agreement with the NYDFS to ensure that these reserves are at all times maintained only in safe and liquid assets. In addition, the NYDFS oversees the establishment and maintenance of the reserves backing GUSD.
You can view a regularly updated breakdown of the assets backing GUSD on our Trust Center.
In short, our reserve portfolio is intended to maximize safety and liquidity. Publishing our real-time holdings is a way to hold ourselves accountable to our users and our regulators.
We will continue to lean in on transparency across our product suite as we move forward on our mission to unlock the next era of financial, creative, and personal freedom.
Onward and Upward.
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