GUSD Savings Accounts – How to Make Money With Gemini Dollar

Last updated on 5th April 2021


Gemini Dollar (GUSD) is a stablecoin pegged to the US dollar at a ratio of 1:1. It was created by Gemini and is widely regarded as the first regulated stablecoin in the world. It’s regulated by the New York Department of Financial Services (NYDFS). The State Street Bank and Trust Company holds US dollars corresponding to the number of GUSD in circulation. To verify the peg, BPM, LLP, a reputable tax, assurance, and advisory firm, examines SSBTC deposits monthly.

GUSD runs on Ethereum blockchain. It is an ERC-20 token. The respective smart contracts that enable transactions with the Gemini Dollar are audited by a security and R&D firm, Trail of Bits, Inc.

The Company Behind GUSD

Gemini founded the token with first and foremost consideration of security and ethical transactions. The New York-based trust company underlies cybersecurity requirements, capital reserve requirements, and banking compliance as established under NY banking law and the NYDFS. The company is also a qualified custodian and fiduciary. Currently, GUSD’s market cap is $124.05 million with 123,649,270 coins in circulation.

How Does GUSD Work?

To get started with the Gemini Dollar, you must open an account on the Gemini website. For added security, you can enable two-factor identification. Then, you’re asked to provide a bank account to transfer US dollars from and to. You will be subject to KYC and must upload valid photo ID.

When you buy GUSD from Gemini, the tokens are issued at once. You can exchange them for USD on the platform at any time and as long as you’re exchanging $100 or more.

GUSD is characterized by an elegant, yet simple mechanism for creating and redeeming tokens. This is applied to encourage adoption and promote usability. When you withdraw, Gemini dollars are created. Withdrawals are made to any address on Ethereum. The platform debits the corresponding amount of USD from the user’s Gemini account balance. When the user deposits on the platform, the GUSD is redeemed or removed from circulation. You can exchange GUSD for USD at a 1:1 exchange rate.

GUSD Insurance and Security

GUSD reserves are insured by the FDIC. The maximum coverage per user is $250,000. GUSD specifications necessitate a network allowing for decentralized app development, including smart contracts, which one can use to transfer and hold value. Ethereum’s ERC20 standard has been adopted globally. A multitude of services and software supports tokens that are ERC20 compliant. Gemini decided to build GUSD on the ETH blockchain because building it on a native one would decelerate adoption. Users of the Gemini Dollar can hold it in any ETH address as well as transfer it on the ETH network.

Guaranteeing Stable Value

An offline mechanism for approval is required for a number of actions that are high risk. Each smart contract within the system must be approved by a custodian, which can be an offline or online keyset or another smart contract. One custodian may look to another and so on to establish a custodianship chain. For example, a smart contract might ultimately seek approval from three to a keyset. If custodianship is terminated, one creates a mechanism to approve its actions.

The best thing about GUSD is security. GUSD’s issuer takes care to make sure that the number of coins in circulation never exceeds the US dollar balance. The Gemini Dollar offers the flexibility of a mechanism of approval online as well as the security of one of offline approval. This is Impl, the hybrid solution of custodianship. This is the smart contract that manages token supply increase involving both mechanisms. Gemini inserts PrintLimiter, a smart contract, into the ‘Impl’ custody chain to achieve this.

Gemini’s ‘Proxy’ seeks approval from a ‘Custodian,’ which seeks it from a keyset offline in turn. Gemini replaces the current Impl instance by telling Proxy to confer active token execution to a new Impl instance. Then, it tells ‘Store’ to treat the new Impl instance as the only source that can be trusted when endorsing GUSD ledger updates.

How Long do GUSD Transactions Take?

A GUSD transaction undergoes 25 confirmations on the blockchain, which take about 15 minutes. Transactions take longer when buying Bitcoin and/or using bank transfer. People who exchange GUSD for Bitcoin need to wait 2-3 hours to send a withdrawal. In rare cases, it can take 48 hours. You can convert the Bitcoin to US dollars and transfer the amount to a bank account when you receive the Bitcoin in your Gemini account.

Bank transfers take 4-5 business days. In this time, the bank confirms availability of the funds. You need to wait even if the balance shows the funds have left.

How to use GUSD and who Accepts It?

GUSD is used to provide liquidity, making it a good choice for liquidity pools like automated DeFi market makers. Its stable price makes it readily tradable on any decentralized exchange. You can earn high interest on the coin, through a savings deposit or lending. People use it to access US dollar by means of blockchain rails all over the world. It hedges against volatile currencies.

It takes seconds to send GUSD across borders. It’s compatible with Gemini Pay, which means you can use it to buy things from stores. Trading strategies that require US dollars without crypto trade-out are a reason to use it too.

You can earn interest by creating a BlockFi Interest Account (BIA). Other platforms offer this option too. There’s a comparison table you can check at the end of the article.

GUSD can be used as a substitute for USD in trading on platforms that don’t require ID verification.

Trade GUSD against BTC and Other Cryptocurrencies

GUSD is available for trade on Bitstamp, OKex, Exmo, Cex.io, and a few other exchanges.

GUSD on Bitstamp

Bitstamp recently added GUSD to its roster of tokens alongside the open source protocol 0x (ZRX), Maker protocol governance token Maker (MKR), DAI, and Kyber Network (KNC), on which you can swap different tokens instantly. Bitstamp is the longest-running crypto exchange platform in the world. It offers zero trading fees, the option to buy and sell Gemini Dollar, and an account that’s free to open.

GUSD on OKex

You can exchange GUSD for Tether, Bitcoin, Ethereum, and more on OKex. The full list of cryptos available is here.

GUSD on Exmo

The last price for BTC was 0.00001757 on Exmo. You can choose a trading pair based on 24 hour volume.

GUSD on Cex.io

You can trade GUSD for USDT, USD, and EUR on cex.io. On all of these exchanges, it can be transferred easily and much faster than by bank transfers. You can use GUSD to cash out cryptocurrency without the need of cumbersome and expensive fiat money bank transfers immediately. You can make payments, save money, and even run a business on GUSD.

How to Convert GUSD to Bitcoin

You can do this on gemini.com, Coincodex, HitBTC, and more. You can also convert USD into GUSD and earn interest. Gemini is the easiest way to do so. You register at gemini.com and make a deposit in US dollars via a wire or ACH transfer. Then, you can withdraw Gemini dollars to a GUSD address on BlockFi or a similar exchange. The dashboard lists GUSD deposit addresses. This is how you convert USD to GUSD. The APY on the balance is listed in the table at the end of the article. BlockFi pays this interest out on the first business day of each month.

How to Cash out GUSD

Gemini members generate an address for deposits in GUSD to redeem to their Gemini accounts. This is done on Gemini’s US dollar deposit page. After redeeming the tokens, they get them at their unique ETH deposit address. The funds are converted to USD automatically and included in the respective balance.

Gemini’s fees are nominal, largely the same as the network fees for cryptocurrency withdrawals. Any banks involved in the process will charge fees, but Gemini does not.

How to buy GUSD with Credit Card

This simple procedure transpires in a few steps. Register on a site where this is supported and log into your account. Find the “Buy” option and specify the type of payment, the number of coins, and the type of cryptocurrency. After undergoing verification, you’ll receive the tokens in your wallet.

GUSD Savings Accounts

Gemini is offering rates up to 100 times the national US savings account average and these aren’t even their best ones. Their savings program is available to customers in the US. The UK FCA issues the creators of GUSD an electronic money license last year. Their services have been available in the UK since then.

Comparison Table

The following table lists savings account providers and the APY on GUSD deposits. Information about minimum APY is not available.

Provider Max APYs Gemini Dollar (GUSD)
Aave/DeFi 19.6%
Celsius Network 10.5%
BlockFi 8.6%
Gemini 7.4%

Our Final Say on GUSD

Security is by far the biggest plus GUSD has to offer. Keys authorizing high-risk actions are in cold storage (offline), more specifically a proprietary system. These actions also require digital signatures known as Dual Control because at least two entities need to sign. This ensures fault tolerance as well as security. Keys are stored, created, and managed through modules for hardware security. The module rating has to be at least 140-2 Level 3 FIPS PUB.

You can revoke pending actions. This enables you to cancel (obliterate) a malicious or faulty action prior to its execution. Even after authorization, the system locks high-risk actions for a certain period of time before they are carried out. This gives a grace period to identify security issues and respond to them in a timely manner.

Like everything else, GUSD isn’t without downsides. To perform transactions with GUSD, you must have your identity verified. This process can be cumbersome although we can’t blame Gemini.

GUSD is subject to stricter regulation than most stablecoins. The tokens can be confiscated or censored if the regulator responsible does not endorse a transaction or another activity connected to them.


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