Robinhood, Kraken, Paxos, and other central finance and crypto firms have established a new consortium to promote stablecoin adoption. This collaboration has launched the USDG, a dollar-pegged digital asset issued on Ethereum that was launched under this collaboration to simplify global digital transactions. Open to all, the Global Dollar Network is a secure and compliant open system for stablecoin transaction speed. It played a part in the consortium’s formation on Nov. 5, which aimed to accelerate the use of stablecoin.
Paxos, the blockchain infrastructure firm behind USDG, said the stablecoin will launch on the Ethereum blockchain initially, followed by another layer of expansion to other platforms as regulations evolve. Paxos has partnered with Singapore-based DBS Bank to back the USDG with 1:Cash deposits, short-term government securities, and cash equivalents held as 1 U.S. dollar reserves. The idea behind this partnership is to create credibility and stability so that users can redeem their USDG tokens for fiat currency as they want.
Paxos, the blockchain infrastructure firm responsible for USDG, will initially manage the stablecoin on the Ethereum blockchain, with plans to expand to other platforms as regulations evolve. Paxos has partnered with Singapore-based DBS Bank to back the USDG with 1:1 U.S. dollar reserves, which include cash deposits, short-term government securities, and cash equivalents. This partnership aims to establish credibility and stability, ensuring that users can redeem their USDG tokens for fiat currency on demand.
Paxos Launches USDG to Rival Tether and USDC
Paxos and its partners are trying to create a competitive alternative to dominant stablecoins such as Tether (USDT) and USD Coin (USDC) with the launch of USDG. Currently, 80% or more of the stablecoin market on Ethereum in circulation is held by two of these two stablecoins—Tether and Circle, respectively. Our Global Dollar Network encourages competition by providing a stablecoin with a more equitable, compliance-minded model.
‘’The consortium’s goal has been to push a competitive market for wage-regulated stablecoins, and something that has been stunted with few players is what we see,” reported Kraken’s co-CEO Arjun Sethi.
The consortium with USDG is interested in encouraging mainstream adoption of cryptocurrencies, chiefly amongst businesses and institutional users. This way, the Global Dollar Network would be focused on the transparent and regulated structure that would bring new use cases for stablecoins for other sectors.
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USDG issuing its tokens out of Singapore supports the Monetary Authority of Singapore’s stablecoin framework, announced in August 2023. Paxos says it’s striving for high compliance standards by adhering to these regulations, setting the benchmark for other stablecoin issuers.
USDG Stablecoin Bridges Finance and Blockchain Sectors
The Global Dollar Network will invite a range of qualified entities, such as custodians, exchanges, and fintech companies, to participate. These entities will help create a trusted, secure environment for digital dollar transactions. To support open blockchain and create a safe and fast global network for global transactions, Paxos envisions the Global Dollar Network as an infrastructure that assists in bridging traditional finance with blockchain technology.
This write-up is all about strong regulatory adherence in setting up the backing for the USDG stablecoin, backing Paxos and DBS Banks to attract enterprise adoption. This model ensures whatever stablecoin is chosen is secure and accountable and will attract a wider set of users from the corporate sector. The DBS partnership can help spread the use of stablecoins to the enterprise level, perhaps carving out a path for business transactions with extremely stable currencies, said Paxos’ head of product, Ronak Daya.
In addition, Paxos has previously launched other digital assets, such as PayPal USD, Pax Dollar (USDP), and Pax Gold (PAXG), its experience in regulated digital currency solutions. With USDG, the firm expands into the stablecoin market as a next step, showcasing the intent to offer compliant and transparent digital assets.
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