A league of major firms from traditional finance has partnered to launch the Global Dollar Network, a regulation-compliant network designed to accelerate the adoption of stablecoins.
A league of traditional finance and crypto companies, including Robinhood, Kraken, Galaxy Digital, and Paxos, have formed a council supporting the latest stablecoin pegged to the United States dollar.
In a Nov. 5 statement, blockchain infrastructure firm Paxos shared that the new “open network” was designed to accelerate the adoption and use of stablecoins worldwide.
“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,” said Kraken
Co-CEO Arjun Sethi in a statement.
The network is designed to support the global adoption of Paxos’ USDG stablecoin, launched by the firm on Nov. 1.
USDG is currently available only in the Ethereum blockchain, but Paxos said the stablecoin will be made available on various chains as regulations evolve.
Paxos will issue the USDG stablecoin out of Singapore, which the firm says is “substantively compliant” with the Monetary Authority of Singapore’s Upcoming stablecoin framework, established in August 2023.
Qualified parties, including custodians, exchangers, and fintech firms, will be able to join the Global Dollar Network by way of invitation.
The firm noted that the stablecoin’s
US dollar backing will be reserved and managed by Singapore’s largest banking institution, DBS Bank. USDG is backed 1:1 with the US dollar in dollar deposits, short-term US government securities and other cash equivalents, ensuring users can redeem their tokens for fiat.
Speaking about the launch of USDG, Paxos’ head of product Ronak Data said the DBS partnership will enable enterprise -level stablecoin adoption.
Other digital asset offerings by Paxos’ include PayPal USD, PAX DOLLAR (USDP), and PaxGold(PAXG).
The USDG stablecoin and its global dollar Network will launch In a market dominated Largely by two major stablecoin issuers, Tether and Circle’s USD Coin which command respective dominance of 56% and 27% of the stablecoin supply on Ethereum’, as reported by DefiLlama data.
