Crypto exchange Coinbase will now let its retail customers buy or trade the DAI stablecoin, so long as they don't live in New York.
Customers in every jurisdiction – except New York initially – can now access the cryptocurrency, which runs on top of the ethereum blockchain.
Although Coinbase did not explain why the token is not yet available in New York, it may be waiting on approval from the state's Department of Financial Services, which in the past has reserved the right to approve tokens before they are listed on exchanges.
Unlike other stablecoins, DAI is backed by collateral on the MakerDAO platform, but still seeks to maintain a peg to the U.S. dollar, the exchange noted, adding:
Other stablecoins, such as the Gemini Dollar or the Paxos Standard, are backed on a 1:1 basis by dollar holdings.
The stablecoin has notably had difficulty maintaining its peg in the past, with MKR token holders voting repeatedly to increase the so-called "stability fee" in an effort to ensure that DAI continues to hold its peg.
Borrowers pledge ether as collateral to take out DAI; when they want to get their ether back, they have to return their DAI, plus the stability fee, payable in MKR or DAI. Hence, increasing the stability fee incentivizes borrowers to return their DAI, reducing the supply on the market and theoretically driving their price back up to $1.
UPDATE - Coinbase has announced that ETH-DAI orders are in cancel-only in the Pro order book. This announcement came about one hour after commencement of trading.
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