Crypto exchange Gemini announced Monday that it is launching a dollar-backed stablecoin built on ethereum.

The Gemini dollar is designed to provide liquidity for users hoping to send or receive U.S. dollars through the ethereum network, a press release stated. It will be "strictly pegged" to the dollar, with the Gemini Trust Company holding USD deposits corresponding to the number of tokens in circulation.

Notably, the release stated, the New York Department of Financial Services (NYDFS) has reviewed and approved the Gemini dollar.

To safeguard its holdings, Gemini will hold the fiat currency backing the stablecoin in the U.S.-based State Street Bank, and insure it through the Federal Deposit Insurance Corporation (FDIC)'s "pass-through" deposit insurance program, within certain limits.

Independent auditor BPM Accounting and Consulting will review the company's bank holdings on a monthly basis, with Gemini intending to make those audits publicly available, according to MarketWatch.

Gemini co-founder Tyler Winklevoss said in the release:

Registered Gemini customers will be able to convert USD into Gemini dollars and deposit them in an ethereum address from 10:00 EST (14:00 UTC) Monday. Likewise, customers can convert tokens back into U.S. dollars by depositing them into their Gemini accounts.

With the news, Gemini joins blockchain startup Paxos, which also launched a USD-backed stablecoin today. Like the Gemini dollar, the Paxos Standard has been approved by the NYDFS, and will similarly be regulated through the body.

U.S. dollars image via Shutterstock