Paxos Joins Other Crypto Firms to Launch USDG Stablecoin

Paxos and other crypto players collaborate to create a new dollar-backed stablecoin to increase global crypto adoption.

Stablecoin issuer Paxos has partnered with Kraken, Robinhood, and others to launch the Global Dollar (USDG) stablecoin. The new stablecoin is designed to accelerate global digital asset adoption.

It is issued by Paxos Digital Singapore Pte. Ltd., with the Monetary Authority of Singapore (MAS) acting as the regulatory watchdog.

USDG Enters the Stablecoin Arena

The USDG stablecoin issuer will provide a secure, transparent, and user-oriented experience by sharing nearly all reserve earnings with its network participants. USDG aims to establish a new benchmark in the stablecoin ecosystem by implementing an innovative profit-sharing scheme to rival market leaders like Tether’s USDT and Circle’s USDC.

The Global Dollar Network (GDN) and DBS Bank, the biggest bank in Southeast Asia, will provide fintech support for the USDG. Like other USD-pegged stablecoins, USDG is pegged at a 1:1 ratio to the US dollar, guaranteeing stability for users who want to avoid volatility.

Paxos will use liquid assets, such as short-term US Treasury securities and US dollar deposits, to back this stablecoin and contribute to its long-term value retention. Thus, holders can easily exchange their tokens for fiat money anytime, an essential feature for businesses and financial institutions that need consistent liquidity.

With its strong backing and equitable revenue-sharing concept, USDG stands out from other stablecoins in the market, increasing its attractiveness to businesses and regulatory agencies. USDG redistributes almost all its reserve-generated money to network participants rather than keeping reserve profits exclusively for its issuer.

This strategy promotes inclusivity and encourages wider adoption.

A Collaborative Effort for Financial Innovation

The Global Dollar Network (GDN), a consortium created to promote cross-sectoral collaborations in the cryptocurrency industry, is the cornerstone of USDG’s emergence. By pooling the knowledge of different industry participants, such as exchanges, custodians, fintechs, and payment processors, the network aims to transform the stablecoin market.

USDG can be integrated by players from various sectors, such as banks, merchants, card networks, and investment platforms, promoting a vibrant, multipurpose financial environment. GDN envisions a future where financial transactions are seamless, transparent, and efficient.

By bringing together different stakeholders, the network accelerates the adoption of USDG.

An Expanding Ecosystem for Tether’s USDT Stablecoin

Meanwhile, Tether’s USDT continues to draw significant activity and liquidity on the Toncoin network. In contrast to its previous image as a specialized platform that caters mostly to tap-to-earn games, Toncoin has developed into an ecosystem that now houses 892 million USDT.

Toncoin’s USDT trading volume exceeds several other chains, demonstrating its increasing significance in the larger cryptocurrency scene. Toncoin allows USDT (on its platform) and TON (its native token) to be used as utility and gas fees.

In October, the ecosystem recorded 3.25 million USDT transfers. Furthermore, network applications, such as mini-apps and games like Catizen, which noted almost half a million transactions in a single month, are responsible for the high USDT trading activity.

USDT’s presence on Toncoin is a bridge of liquidity and stability, even though this ecosystem includes several volatile crypto assets.

Toncoin’s DeFi Landscape

Toncoin’s DeFi (Decentralised Finance) sector has encountered certain challenges despite the spike in USDT activity. Even though Toncoin has $352 million in total value locked (TVL), most of this is contained in decentralized exchanges (DEXs) like DeDust and Ston.Fi and native staking protocols.

Compared to other chains, Toncoin’s DeFi ecosystem has room to expand. Meanwhile, the value of TON has declined. Staked TON assets declined when TON’s value dropped to about $4.56 due to wider market corrections, affecting Toncoin’s DeFi infrastructure.

Meanwhile, Toncoin has revealed intentions to introduce a stablecoin linked to the dirham, the United Arab Emirates (UAE) national currency, in response to the increasing demand for such tokens in this region. The announcement during the TON Gateway event in Dubai highlights Toncoin’s efforts to expand its global reach and cater to region-specific needs in the crypto space.

A dirham-backed stablecoin could attract more Middle Easterners to the platform, supporting its goal to become the preferred blockchain for stablecoins.