- Issued by Paxos in Singapore, Global Dollar USDG aligns with future MAS regulatory standards and stands out from other stablecoins.
- Under the USDG model, network participants are rewarded based on their contribution to network connectivity and liquidity.
A group of leading companies in the cryptocurrency industry have unveiled a new stablecoin called Global Dollar (USDG). This stablecoin was designed to channel the return of reserve assets to participating entities that facilitate its adoption.
New stablecoin Global Dollar USDG enters the market
For context, the Global Dollar Network, as the system is called, has a strong roster of industry players among its early backers. It is d’Anchorage Digital, Bullish, Galaxy Digital, Robinhood, Kraken, Nuvei et Paxos.
Paxos, which issues USDG from Singapore, said the stablecoin is designed to closely align with regulatory standards. According to Paxos, USDG is “substantially compliant” with the future regulatory framework for stablecoins established by the Monetary Authority of Singapore (MAS), according to the CNF report.
Charles Cascarilla, CEO of Paxos, explained that USDG represents a different approach to stablecoins by prioritizing rewards for participating entities rather than individual users. “This is a community token,” Cascarilla said. Also, he added: “Anyone can join the Global Dollar Network and accumulate rewards for their activity. We distribute approximately 97% of revenue. »
Stablecoins are a major sector of digital finance, with the market dominated by Tether and Circle, which issue the two largest stablecoins, USDT and USDC, respectively. However, USDG aims to distinguish itself from these leading stablecoins by offering yield sharing incentives. This development comes at a time when stablecoins are preparing for a major shift from trading to storing value, CNF reported.
Additionally, Cascarilla pointed out that while Tether and Circle generally retain all revenue from reserves, the structure of USDG requires that it distribute revenue generated from reserves. These reserves will consist largely of US Treasury securities.
Reward for participants
Additionally, this model rewards participants based on their role in improving connectivity and liquidity within the network. Mr Cascarilla described this system as essential to building a “thriving ecosystem”.
Under USDG, various activities can contribute to award eligibility. “The way we designed this system is that participants are rewarded for activities that contribute to increasing the utility of the network,” Cascarilla said. He also emphasized that because companies contribute to the network's growth in various ways, rewards will vary based on each partner's specific contributions.
Although the USDG stablecoin targets businesses rather than individual users, it will still be accessible across the United States through the distribution network of participating companies. The distribution network undoubtedly includes Anchorage Digital, which operates in all 50 US states. Mr. Cascarilla explained that this participant-centric model reflects the goal of encouraging network expansion by rewarding companies that support the stablecoin.
To facilitate reserve management and ensure better liquidity management for USDG, DBS Bank, the largest bank in Southeast Asia by assets, has been appointed as the lead banking partner. DBS will oversee liquidity management and custody services to strengthen network reliability.
