I think it is a bad idea, because Tether received a lot of bad publicity and investors will automatically shy away from this, based on Tether's history. The barrier to entry into Gemini will also prevent large scale exposure to this, so it will not add a lot of liquidity, if there is no large volume trading being done.
Yea, I am also curious to see how this pan out, because this is a novel angle to inject Crypto into Wall Street.
As I see it, it's one or the other. Either KYC is too stringent and it discourages liquidity from entering Gemini's markets (so nothing really changes)... or it isn't. We'll have to wait and see. I wouldn't write it off just because of Tether's history. Gemini's reputation + NYDFS approval is in another universe vs. Tether.
There's obviously going to be a secondary P2P market that avoids interfacing with AML/KYC. Since it's built on ETH, there's nothing anybody can do to stop that from happening, as Gemini will only have control over issuance and redemption. I'm curious to see how regulators deal with that, and I'm honestly a bit surprised to see this approved by NYDFS.
https://twitter.com/provoost/status/1039183325838098432Relevant thread here.
I suspect a 'legit' stablecoin will open up a whole new world of weirdness and dodginess and I don't really see how they can completely work their way around it.
Indeed, that's what I'm getting at. They can only control token issuance and redemption since have no control over the ETH network. Obviously, there's no way to stop North Korea from accruing these coins.