On November 5, blockchain infrastructure provider Paxos announced the formation of a consortium that includes major names like Robinhood, Galaxy Digital, and Kraken. This group aims to support the Global Dollar Network while promoting the adoption of a new stablecoin pegged to the U.S. dollar, USDG. This “open network” addresses limitations in the regulated stablecoin market, encouraging competition and enabling various stablecoin use cases globally. Launched on November 1, Paxos’s USDG operates initially on the Ethereum blockchain. However, it plans to expand to other chains as regulatory frameworks evolve.
Addressing Stablecoin Market Competition
Kraken co-CEO Arjun Sethi emphasized that USDG aims to “upend” the current stablecoin market dynamics. He highlighted the need for a more equitable model to foster industry growth. While Paxos’s other products, such as PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG), have gained traction, USDG specifically targets broader stablecoin adoption. It invites custodians, exchanges, and fintech firms to join the network.
Backed by DBS Bank in Singapore
USDG will be issued from Singapore, aligning with the Monetary Authority of Singapore’s stablecoin framework. Furthermore, Paxos claims this framework provides a compliant foundation. DBS Bank will manage USDG’s reserve assets, which include U.S. dollar deposits and short-duration government securities. Ronak Daya, Paxos’ head of product, stated that the partnership with DBS will facilitate secure, enterprise-level stablecoin adoption, allowing USDG holders to redeem tokens for fiat.
Competing with Tether and USD Coin
Currently, Tether (USDT) and USD Coin (USDC) dominate the stablecoin market on Ethereum, holding approximately 56% and 27% of the supply, respectively, according to DefiLlama. Thus, the introduction of USDG, backed by a global consortium, brings new competition and aims to expand stablecoin applications across financial sectors.
In summary, with the launch of USDG and the Global Dollar Network, Paxos and its partners are positioning themselves to tap into a more competitive and accessible stablecoin landscape.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
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