TL;DR
- Paxos, along with major crypto firms like Robinhood and Kraken, has launched the Global Dollar (USDG) stablecoin, designed to accelerate stablecoin adoption globally.
- The USDG stablecoin is pegged 1:1 to the U.S. dollar, backed by high-quality liquid assets, and will share nearly 100% of reserve-generated revenue with network participants, fostering broader financial solutions.
- The Global Dollar Network aims to revolutionize the stablecoin market by offering a trusted and compliant solution, with additional cross-sectoral users joining from November 5, 2024, to support global money movement innovation.
Paxos, a leading regulated blockchain infrastructure provider, has joined forces with several major crypto firms to launch a new stablecoin, the Global Dollar (USDG). This initiative, announced on November 4, 2024, brings together prominent names such as Robinhood, Kraken, Galaxy Digital, Bullish, Anchorage Digital, and Nuvei.
The USDG stablecoin is designed to accelerate the adoption of stablecoins globally and is issued by Paxos Digital Singapore Pte. Ltd., under the oversight of the Monetary Authority of Singapore (MAS).
USDG’s Key Features and Benefits
The USDG stablecoin is pegged 1:1 to the U.S. dollar and is backed by high-quality liquid assets, including U.S. dollar deposits and short-duration U.S. Treasury securities. This ensures that USDG maintains its value and provides users with the ability to redeem their tokens for fiat currency at any time.
Unlike many existing stablecoins, USDG will share nearly 100% of the revenue generated from its reserve assets with network participants, rather than retaining it for the issuer. This equitable model is expected to attract a wide range of participants and foster broader financial solutions involving the USDG token.
Enhancing Global Adoption
The Global Dollar Network, which supports the USDG stablecoin, aims to revolutionize the stablecoin market by offering a trusted and compliant solution that meets the stringent demands of global enterprises.
The network harnesses the combined capabilities of its partners to encourage the creation of innovative solutions in both cryptocurrency and the wider financial landscape.
Starting November 5, 2024, additional cross-sectoral users, including merchants, investment platforms, custodians, card networks, payment fintechs, banks, exchanges, and protocols, will be able to join the Global Dollar Network to support global money movement innovation.
Industry Impact and Future Prospects
The launch of USDG comes at a time when the stablecoin market is dominated by two major players, Tether’s USDT and Circle’s USDC. By introducing a new model that shares reserve earnings with network participants, USDG aims to address the shortcomings of existing stablecoins and promote a more equitable and efficient financial system.
The involvement of DBS Bank, Southeast Asia’s largest bank, as the primary banking partner for USDG reserves, further enhances the credibility and stability of the stablecoin.
