Robinhood, Galaxy Digital, Kraken and Paxos launch Global Dollar Network, a new network to promote USD-pegged stablecoin adoption.
Several companies from the cryptocurrency and traditional finance sectors have announced the launch of Global Dollar Network. The initiative aims to improve the adoption of US dollar-pegged stablecoins in compliance with current regulations. Among the companies involved are Robinhood, Galaxy Digital, Kraken, Anchorage Digital and Paxos.
Project details
According to a statement released by Paxos, the Global Dollar Network was created to support the global adoption and use of stablecoins. The main objective of the network is to support the USDG stablecoin, issued by Paxos on November 1st, 2023. The income generated from USDG reserves, which like other stablecoins are US Treasury Securities, will be distributed among participants based on how these companies contribute to promoting USDG adoption.
Distribution and compliance
Currently, USDG is exclusively available on the Ethereum blockchain, with future plans to expand to additional blockchains based on regulatory developments. The stablecoin issuance is managed by Paxos through its Singapore headquarters, adhering to the stablecoin regulatory framework established by the Monetary Authority of Singapore in August 2023. The reserves ensuring USDG’s stability are managed by Singapore’s leading banking institution, DBS Bank. Paxos has confirmed that the stablecoin is backed by US dollars, short-term government securities, and other easily liquidable assets.
The Global Dollar Network is accessible to qualified entities, including custodians, exchanges, and fintech companies, which can join by invitation only. The network’s goal is to promote stablecoin use by integrating new participants into the crypto-financial ecosystem.
Market context
The launch occurs in a market currently dominated by Tether (USDT) and USD Coin (USDC), which represent 56% and 27% of stablecoins on the Ethereum blockchain, respectively, according to data provided by DefiLlama. Overall, USDT holds 69.53% of the current stablecoin capital on Ethereum, which amounts to $84 billion.
