Will Stablecoins, Regulation, and ETF Provide Stability for Crypto? An Inside Look With the Winklevoss Twins


Cameron and Tyler Winklevoss, who are among the biggest holders of bitcoin and are the founders of crypto exchange Gemini, are pursuing crypto regulation. They say they’ve been working to “bring best practices from the equities world and the derivatives world into the crypto world.” And they believe stablecoins are the future.

Stablecoins Could Open the Next Wave of Crypto Innovation: Real Asset Tokenization

In an interview with Fortune promoting their NYC pro-regulation ad campaign alongside the launch of the Gemini app, they said they see stablecoin as the gateway to the next wave of innovations, when we could see assets like real estate becoming tokenized.

The Winklevoss twins liken mainstream crypto adoption to the fact that nobody brings a bar of gold to the cafe to pay for their coffee. You bring dollars instead. Theoretically, their analogy goes, stablecoins are a similar mediator between cryptos and everyday purchases, like a cup of coffee. “We brought dollars onto the blockchain now with Gemini dollars so that you can actually buy your cup of coffee now with cryptocurrency,” says Tyler.

They described how stablecoins like their own Gemini Dollar, which they’re calling “the world’s first regulated stablecoin,” allow you make purchases in crypto without worrying about the notorious issue of volatility. “You can buy other cryptos, you can take it to other exchanges and trade, you can also use it for decentralised applications.” Gemini is pegged to the US dollar.

Bitcoin Still Better Than Gold, They Say

The twins are optimistic about bitcoin’s future, despite its breathtaking plummet over the course of last year. They famously predicted that bitcoin could hit $320,000 (as of press time it’s about 0.9 percent of that), and their faith is strong. “Our thesis has not changed,” Cameron says. “We think bitcoin is digital gold, and it’s better at being gold than gold is. The only thing gold has over bitcoin is a 3000 year head start.”

They’re among the highest crypto holders in the world, second only to Satoshi Nakamoto and perhaps a few others. After they sued Mark Zuckerburg for stealing their idea for The Face Book, the Winklevoss twins sank 11 million of their 65 million dollar settlement into bitcoin. Those holdings are now estimated to be in the billions.

They also founded Gemini, building the exchange on the principle that crypto should have “thoughtful regulation”, a principle which is reflected in their ads which are now peppered around New York City.

A Bitcoin ETF Could Help Bring Stability to Crypto

Additionally, the Winklevoss brothers have been working to start a bitcoin exchange-traded fund (ETF), but so far such a fund has not approved by the SEC. They’re not the only ones with such an ambition. Last month, Bitwise Asset Management and VanEck/SolidX both applied with the SEC for approval of their proposed bitcoin ETFs. Blockforce Capital has applied for two, most recently on Monday. The SEC has been hesitant.

Cameron Winklevoss has expressed sympathy for the SEC’s concerns, and attributes their conservative stance to the need for increased market surveillance and protective measures to prevent manipulation. Some experts, like Edelman Financial Engines Founder Ric Edelman, consider a bitcoin ETF an inevitability. “It’s virtually certain,” he says. “The only question is when.”

But will an ETF improve crypto stability? Perhaps indirectly. It will make crypto trading more accessible, and therefore more popular. Higher trading volumes will almost certainly reduce volatility. So in the long run, an ETF could shore up efforts to make crypto stable and palatable to the traditional investor.

Crypto Ripe for Next Level of Maturity, Stability

With a new draft of the Token Taxonomy Act, which could be introduced this week, the kind of “thoughtful regulation” the Gemini founders are calling for could be right around the corner. SEC regulation and the eventual approval of a crypto ETF will theoretically work together with stablecoins to take crypto to its next level of maturity. In light of this, crypto is ripe for a post-bubble reinvention.


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