- Robinhood, Kraken, and Paxos have partnered to launch the Global Dollar Network, a regulated stablecoin network designed to increase the adoption of USDG.
- This collaboration seeks to address regulatory hurdles while at the same time creating a competitive environment in the stablecoin industry.
The adage ‘ unity is power’ has never been more evident than in the groundbreaking collaboration between big players in traditional finance and the cryptocurrency sector. Top dogs like Robinhood, Galaxy Digital, Kraken, and Paxos have joined forces to create the Global Dollar Network, a stablecoin network aimed at strengthening dollar-backed stablecoin USDG worldwide.
The Global Dollar Network was unveiled on the 5th via an official blog post and it aims to revolutionize the stablecoin market, a sector which currently holds $171.76B.
It is worth noting that this innovative project is spearheaded by Paxos.
The crypto and regulatory landscapes have been equally turbulent, well, this collaboration seeks to mitigate and address regulatory hurdles while at the same time creating a competitive environment.
It is worth noting, the start of November saw Paxos launch USDG, a stablecoin pegged to the U.S. dollar. Additionally, this stablecoin is currently available on the Ethereum blockchain. However, Paxos plans to expand USDG’s availability across multiple blockchains as global regulations evolve.
(1/4) Today marks an exciting milestone in Paxos’ history. We’re pleased to introduce @global_dollar, the latest US dollar-backed stablecoin issued by Paxos. This is the 6th trusted digital asset from Paxos and its affiliates.
View the official press release here:… pic.twitter.com/G7fb9Ny9bT
— Paxos (@Paxos) October 31, 2024
This broad partnership support is intended to ensure that USDG becomes a widely accessible stablecoin for different users, varying from individual enthusiasts to large-scale investors.
Kraken’s co-CEO Arjun Sethi expressed optimism about the impact of the Global Dollar Network on the stablecoin landscape, emphasizing that limited competition in regulated stablecoins has hindered the industry’s 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, Sethi stated.
It is worth mentioning that the launch of USDG and the Global Dollar Network comes as Paxos and its partners enter a stablecoin market currently dominated by big players such as Tether (USDT) and USDC, which as a matter of fact command a combined market share of over 80% on Ethereum.
As a step towards regulatory clarity from USDG, Paxos is issuing USDG from Singapore, where the stablecoin aligns with the Monetary Authority of Singapore’s stablecoin guidelines established in August 2023.
This regulatory adherence is important as it ensures that USDG operates within clear legal status.
Certain events have led regulatory bodies across the globe to stay on high alert. The most notable is the Terra Luna crash which almost wiped almost $50 billion in valuation.
USDG is fully backed 1:1 by the US dollar through reserves that include dollar deposits, short-term US government securities, and cash equivalents. Notably, DBS Bank, one of Singapore’s largest financial institutions, will manage these reserves.
Paxos has confirmed that qualified entities such as custodians, fintech companies, and exchanges will be able to join the Global Dollar Network by invitation, allowing a select group of trusted participants to contribute to and benefit from the network.
