Paxos has introduced USDG, a new dollar-pegged stablecoin, with backing from major crypto players like Kraken, Galaxy Digital, and Robinhood. These companies formed the Global Dollar Network, a consortium focused on expanding regulated stablecoins worldwide. Issued in Singapore, USDG aims to offer a balanced model, challenging Tether and Circle in the market.
Key Points:
- Consortium Partners: The Global Dollar Network includes partners like Anchorage Digital, Nuvei, and Bullish, with DBS as the custody partner.
- Regulated Reserves: USDG complies with Singapore’s stablecoin regulations and holds reserves in U.S. dollars and cash equivalents.
- Industry Integration Plans: The consortium plans to involve custodians, exchanges, fintechs, merchants, banks, and investment platforms.
USDG launched on Oct. 31 and currently operates on Ethereum. It plans to expand to other networks as regulations evolve. Paxos targets mainstream users by addressing the “lack of competition” in stablecoins, according to Kraken co-CEO Arjun Sethi.
Adoption and Incentives
The Global Dollar Network aims to increase USDG adoption by offering incentives to members. Each consortium member earns rewards based on USDG reserve yields, linked to their network contributions.
Paxos CEO Charles Cascarilla emphasized the open, rewarding structure of the network. “Global Dollar Network will return virtually all rewards to participants and is open for anyone to join. It is designed to incentivize global stablecoin usage and accelerate societal wide adoption of this technology,” he said.
Competitive Outlook
USDG faces a competitive market led by Tether and USD Coin, which dominate 90% of the stablecoin market. Ripple and Stripe are also preparing stablecoin launches, making USDG’s entry timely. With its consortium support, Paxos aims to offer a compliant, yield-bearing alternative that connects the crypto and traditional finance sectors.
