CoinClear

Gemini Dollar (GUSD)

5.8/10

Gemini's NYDFS-regulated stablecoin — impeccable compliance credentials but negligible adoption in a market dominated by USDC and USDT.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Gemini Dollar (GUSD) launched in September 2018 as one of the first stablecoins approved by the New York Department of Financial Services (NYDFS). Issued by Gemini Trust Company — the crypto exchange founded by Cameron and Tyler Winklevoss — GUSD was designed to provide a fully regulated, transparent, and compliant stablecoin for institutional and retail use.

GUSD is backed 1:1 by U.S. dollar deposits held at State Street Bank and Trust Company, one of the world's largest custodian banks. Monthly attestation reports are conducted by BPM LLP, an independent accounting firm. The regulatory framework is stringent: Gemini Trust is a New York trust company subject to NYDFS capital reserve requirements, cybersecurity regulations, and regular examinations.

Despite its strong regulatory credentials, GUSD has struggled to capture meaningful market share. Its market cap has remained below $500M — often significantly below — placing it far behind USDT, USDC, and even newer entrants like PYUSD and FDUSD. The stablecoin's limited DeFi integration, Gemini-centric distribution, and the competitive dominance of USDC in the regulated stablecoin category have constrained growth.

Peg Stability

Historical Performance

GUSD has maintained an excellent peg throughout its history, consistently trading within $0.999-$1.001. The combination of State Street custodianship, NYDFS oversight, and a straightforward mint/redeem mechanism ensures reliable arbitrage. No meaningful depeg events have occurred.

Mechanism

GUSD uses a simple mint/redeem model: authorized users can mint GUSD by depositing USD with Gemini and redeem GUSD for USD at par. Gemini's exchange provides the primary venue for conversions. The mechanism is identical to other regulated fiat-backed stablecoins and provides the strongest possible peg assurance.

Stress Resilience

During the 2022 crypto credit crisis and FTX collapse, GUSD maintained its peg without incident, demonstrating resilience during market stress. The NYDFS regulatory framework provides additional confidence: Gemini is required to maintain reserves sufficient to redeem all outstanding GUSD at all times.

Collateralization

Reserve Composition

GUSD is fully backed by U.S. dollar deposits held at State Street Bank and Trust Company, with a portion allocated to short-term U.S. Treasury bills and money market funds. The reserve composition is conservative and low-risk, designed to ensure immediate redeemability.

Transparency

Monthly attestation reports are published by BPM LLP, detailing the total GUSD supply and the corresponding reserves. As an NYDFS-regulated entity, Gemini is subject to regular examination of its reserve practices. The attestation quality is high, though monthly reporting is less frequent than Paxos's (PYUSD) attestation cadence.

Regulatory Protection

GUSD reserves are held in a bankruptcy-remote structure at State Street, meaning they should be protected even if Gemini faces financial difficulties. This is a meaningful protection for holders, providing assurance that their tokens can be redeemed even in adverse scenarios for the issuer.

Security

Issuer Security

Gemini Trust Company is a well-capitalized, NYDFS-regulated financial institution. The exchange has operated since 2014 without a major security breach affecting customer funds. Gemini's cybersecurity practices are subject to NYDFS cybersecurity regulations (23 NYCRR 500), among the most stringent in financial services.

Smart Contract Design

GUSD's ERC-20 contract is relatively simple, with standard centralized stablecoin functions including pause, freeze, and upgrade capabilities. The simplicity of the contract reduces attack surface. Audits have been conducted by Trail of Bits and other security firms.

Earn Program Controversy

Gemini's Earn program (which allowed users to earn yield on GUSD and other assets through lending to Genesis) resulted in significant user losses when Genesis filed for bankruptcy in 2023. While this didn't directly affect GUSD's reserves or peg, it damaged Gemini's reputation and user trust. The Earn situation was a custodial lending failure, not a GUSD reserve issue, but the association is relevant.

Decentralization

Control Structure

GUSD is fully centralized. Gemini controls minting, burning, contract upgrades, and administrative functions. The token includes blacklist and freeze capabilities for compliance purposes. There is no governance mechanism — all decisions are made by Gemini corporate leadership.

Censorship Capability

GUSD can be frozen at the address level by Gemini to comply with sanctions, law enforcement requests, and regulatory requirements. This is standard for regulated stablecoins and expected given NYDFS oversight, but it means GUSD offers no censorship resistance.

Regulatory Alignment

GUSD is designed for full regulatory compliance, not decentralization. It operates within the established financial regulatory framework and prioritizes compliance over permissionlessness. For users seeking decentralized money, GUSD is not the appropriate tool.

Adoption

Market Position

GUSD's market cap of well under $500M makes it one of the smallest relevant stablecoins. It is dwarfed by USDT ($100B+), USDC ($30B+), and even newer entrants. The stablecoin has not achieved the escape velocity needed to compete with established players.

Exchange Support

GUSD is primarily used on the Gemini exchange, with limited adoption on other platforms. Some exchanges list GUSD trading pairs, but liquidity is thin outside of Gemini. The stablecoin's distribution is heavily concentrated on its native platform.

DeFi Integration

GUSD has minimal DeFi presence. It was briefly integrated into Aave and MakerDAO (as collateral), but its low liquidity and limited demand have prevented meaningful DeFi adoption. Most DeFi users prefer USDC or DAI for their deeper liquidity and broader integration.

Institutional Use

GUSD's regulatory credentials should make it attractive to institutional users, but USDC has captured the institutional regulated stablecoin market with broader distribution and deeper liquidity. GUSD's Gemini-centric approach limits its appeal for institutions seeking a stablecoin usable across multiple platforms.

Risk Factors

  • Negligible adoption: Very low market cap and thin liquidity make GUSD impractical for large-scale use.
  • Gemini dependency: GUSD's fate is tied to Gemini's business success and reputation; Gemini Earn controversy damaged trust.
  • Competitive disadvantage: USDC dominates the regulated stablecoin space with superior distribution and liquidity.
  • Full centralization: No censorship resistance; standard freeze and blacklist capabilities.
  • Limited DeFi utility: Minimal integration and liquidity in DeFi protocols.
  • Sustainability concerns: Low adoption may make GUSD economically unviable for Gemini to maintain long-term.

Conclusion

GUSD is an objectively well-constructed stablecoin from a regulatory and reserve management perspective. NYDFS oversight, State Street custodianship, monthly attestations, and a simple mint/redeem model provide a strong foundation. In terms of reserve quality and regulatory compliance, GUSD is among the best in the industry.

The problem is adoption. GUSD has failed to gain meaningful market share, constrained by Gemini-centric distribution, limited DeFi integration, and the competitive dominance of USDC in the regulated stablecoin category. The Gemini Earn debacle, while not a GUSD-specific issue, further undermined the brand.

The 5.8 score reflects the tension between GUSD's excellent fundamentals (peg stability, collateralization, security) and its dismal adoption metrics. For the rare user operating primarily within the Gemini ecosystem, GUSD is a solid choice. For the broader market, it's a well-regulated stablecoin that nobody uses.

Sources