Paxos Teams Up with Crypto Firms to Launch Regulated Stablecoin, the Global Dollar (USDG)

Paxos, a leading regulated blockchain infrastructure provider, has joined forces with several major crypto firms to launch a new stablecoin, the Global Dollar (USDG).

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, which was 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).

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. Notably, 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.

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.

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.

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