A new consortium featuring Robinhood, Galaxy Digital, Kraken, and Paxos has launched the Global Dollar Network, aiming to broaden stablecoin adoption worldwide. The network, anchored by Paxos’s USDG stablecoin, is designed to be fully compliant with regulatory standards and is backed by top financial institutions to support growth in digital finance.
Paxos Announces the Launch of USDG Stablecoin
On November 5, Paxos announced the creation of an “open network” called the Global Dollar Network. This infrastructure is built to make stablecoins more accessible for mainstream use across various sectors. By leveraging its USDG stablecoin, Paxos and its partners seek to foster greater competition in the regulated stablecoin space, which has historically been dominated by a few major players.
According to Kraken co-CEO Arjun Sethi, the introduction of USDG represents a more “equitable model” in the stablecoin market, intended to encourage widespread adoption and new use cases. This could make digital assets more accessible to both individuals and institutions worldwide.
How the Global Dollar Network Works
The Global Dollar Network’s central feature, Paxos’ USDG stablecoin, officially launched on November 1. Initially, USDG operates on the Ethereum blockchain, with plans to expand to other blockchains as regulatory landscapes evolve.
Paxos issues USDG out of Singapore, ensuring the stablecoin aligns with the Monetary Authority of Singapore’s upcoming stablecoin regulations introduced in August 2023. This makes USDG one of the first stablecoins to embrace these new regulatory standards, setting a foundation for future stablecoin frameworks.
Key aspects of the Global Dollar Network include:
- Regulation-Compliance: USDG is backed 1:1 by US dollar reserves, stored at Singapore’s largest bank, DBS Bank, and further supported by US government securities and cash equivalents.
- Eligibility: Only qualified institutions—such as custodians, exchanges, and fintech firms—can join the network through an invitation, ensuring a secure and compliant ecosystem.
- Interoperability and Redemption: Users can redeem USDG tokens for fiat currency, adding a layer of assurance and flexibility.
Ronak Daya, Paxos’ Head of Product, highlighted that the DBS partnership is a strategic choice aimed at fostering enterprise-level adoption of USDG, enhancing stablecoin usability among larger financial entities.
Competing in a Dominated Stablecoin Market
The Global Dollar Network and USDG face a competitive market dominated by Tether and Circle’s USDC, which control approximately 56% and 27% of the stablecoin supply on Ethereum, respectively. Despite these major players, Paxos and its partners believe that USDG offers a compelling alternative with its regulatory focus and network of major financial backers.
The network launch is part of a broader strategy by Paxos to diversify its digital offerings, which already include PayPal USD, Pax Dollar (USDP), and Pax Gold (PAXG). Through the Global Dollar Network, Paxos and its partners aim to expand the scope and utility of stablecoins for a global audience, laying the groundwork for regulated, reliable digital asset ecosystems.
