Summary
Paxos created USDG, a regulated stablecoin that is supported by well-known cryptocurrency companies Kraken, Galaxy Digital, and Robinhood. As a member of the Global Dollar Network, the stablecoin is expected to face competition from big heavyweights like Circle and Tether.
USDG Launch with Industry Support
Prominent crypto companies including Kraken, Galaxy Digital, and Robinhood are supporting USDG, a newly launched dollar-backed stablecoin from Paxos. According to a Nov. 5 announcement, the Global Dollar Network—a consortium of firms backing USDG—has been formed, with partners like Anchorage Digital, Bullish, Nuvei, and DBS Bank. USDG is regulated by the Monetary Authority of Singapore and backed by liquid U.S. dollar reserves.
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Compliant and Globally Expandable
USDG began operations on the Ethereum blockchain on October 31 and intends to spread to other networks as stablecoin laws change. Managed by DBS Bank in Singapore, the stablecoin is redeemable for fiat currency and is compliant with Singapore’s regulatory framework.
Addressing Market Gaps
In order to assist the stablecoin market reach its full potential, the consortium intends to solve “the lack of competition,” according to Kraken co-CEO Arjun Sethi. Sethi believes USDG will foster mainstream adoption and “accelerate new use cases” for digital assets.
Growth Driven by Consortiums
The USDG reserve yields will be used to reward consortium members, promoting worldwide adoption. Exchanges, banks, fintech companies, and payment providers are among the areas the network plans to onboard partners from, even though it is presently in an invite-only phase.
Going up against Circle and Tether
Since USDG is Paxos’s second stablecoin, it can rival well-known stablecoins like Tether and Circle’s USDC. With the planned entry of new players like Ripple with RLUSD and Stripe through its acquisition of stablecoin provider Bridge, the competition is anticipated to get more fierce.
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