Crypto and traditional finance firms, including Robinhood, Galaxy Digital, Kraken, and Paxos, have formed a consortium to support the newest stablecoin pegged to the US dollar.

In a Nov. 5 announcement, blockchain infrastructure company Paxos revealed that the new “open network” aims to promote widespread adoption and use of stablecoins globally.

Kraken co-CEO Arjun Sethi stated in the announcement, “The lack of competition in the regulated stablecoin market has prevented the industry from reaching its full potential.

USDG upends this dynamic with a more equitable model that will bring mainstream participants into the ecosystem and accelerate new stablecoin use cases.”

The network is designed to drive the worldwide adoption of Paxos’ USDG stablecoin, which was introduced on Nov. 1.

Currently, USDG is available only on the Ethereum blockchain.

However, Paxos indicated that the stablecoin would be expanded to other blockchains as regulatory conditions evolve.

Paxos will issue the USDG stablecoin from Singapore, claiming that the issuance will be “substantively compliant” with the Monetary Authority of Singapore’s stablecoin framework, introduced in August 2023.

Qualified participants, such as custodians, exchanges, and fintech companies, will be able to join the Global Dollar Network through invitations.

Paxos highlighted that the US dollar reserves backing the stablecoin will be managed by DBS Bank, Singapore’s largest banking institution.

USDG will maintain a 1:1 backing with US dollar deposits, short-term US government securities, and other cash equivalents, allowing token holders to redeem for fiat currency.

Paxos’ head of product, Ronak Daya, emphasized that the collaboration with DBS will facilitate enterprise-level adoption of stablecoins.

In addition to USDG, Paxos offers other digital asset products, such as PayPal USD, Pax Dollar (USDP), and Pax Gold (PAXG).

The USDG stablecoin and the Global Dollar Network are entering a market currently led by USDT and Circle’s USDC, which hold market shares of 56% and 27%, respectively, of the stablecoin supply on Ethereum, according to DefiLlama data.

Sources:

https://cointelegraph.com/news/robinhood-kraken-paxos-launch-global-dollar-stablecoin-network

https://paxos.com/blog/introducing-global-dollar-network-an-open-network-to-accelerate-and-reward-global-stablecoin-adoption-driven-by-anchorage-digital-bullish-galaxy-digital-kraken-nuvei-paxos-and-robinhood/

https://x.com/Paxos/status/1853561410615210003

https://defillama.com/stablecoins/Ethereum