The Winklevoss twins, Tyler and Cameron, have received 6 stablecoin-related patents from the United States Patents and Trademark Office. The Gemini cryptocurrency exchange founders were awarded the patents between August 2019 and January 2020.
The filed documents describe a system that resembles the Gemini Dollar (GUSD), a stablecoin that was earlier launched by the twins. According to the documents, the patents are highly applicable in commercial banking thus opening up a wide range of possibilities. Some of the patents describe in detail the process of creating stable value digital currencies while some others describe how financial institutions should deal with them.
Particularly, the third and sixth patent detail the creation of a stablecoin using a public blockchain. The third also describes how the asset-backed stablecoins can be used as collateral in financial transactions through the power of smart contracts.
The fourth patent is also of great importance especially for decentralised finance as it relates to how stablecoins can be used to pay dividends for financial instruments including securities using the blockchain. According to the fourth patent documents, dividends could be alternatively paid in stablecoin for securities such as stocks.
These patents provide a gateway for mainstream financial institutions to leverage the blockchain technology and apply it in delivering novel financial products and services. However, the Winklevoss twins caution that these institutions may require trusted entities that would generate exchange and destroy stablecoins. Therefore, the patents provide a binding element for maintaining the individual fiat currency exchange ratios at 1:1.
The Winklevoss twins also perceive their crypto exchange, Gemini, to be a viable partner that will help financial institutions bridge this gap. Nonetheless, the patents do not specify this implying that other players in the financial market including banks, funds, and trust could also assume the responsibility of issuing the stablecoins. In this respect, the issuing parties can easily create and issue stablecoins then charge their regular fees for their role in mining the new digital asset.
The new issuance becomes a major milestone for the blockchain technology adding to a growing list of patents issued to other organisations. As the technology is growing, more use cases are arising and key players within the sector are competing to research and develop novel applications and patenting them. For instance, IBM was awarded a patent for a ‘self-aware token’ in January with the invention used to record events for offline transactions. Coinbase also received a patent for developing a system that enables Bitcoin transactions over email and another for a monitoring system that identifies and flag non-compliant user accounts.
Image courtesy of Wikimedia Commons
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