Kraken Galaxy Digital and Robinhood Support USDG through the Global Dollar Network
Noteworthy cryptocurrency-centric firms such as Kraken, Galaxy Digital, and Robinhood have collaborated to support the Global Dollar, a regulated yield-bearing stablecoin developed by stablecoin issuer Paxos.
As per an announcement made on Nov. 5, Paxos, in collaboration with Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, and Robinhood, has initiated the Global Dollar Network—a consortium endorsing USDG, a recently launched dollar-backed stablecoin issued in Singapore.
Launched on Oct. 31, USDG is sustained by reserves consisting of liquid assets such as U.S. dollar deposits, short-duration U.S. Government securities, and other cash equivalents. The stablecoin is in compliance with Singapore’s impending stablecoin framework and is regulated by the Monetary Authority of Singapore.
Crafted by Paxos Digital Singapore, Paxo’s local subsidiary, the stablecoin is presently confined to the Ethereum blockchain but has plans to reach out to other networks and spread globally as Stablecoin regulations develop.
Paxos enlisted Singapore’s largest bank DBS as its custodial partner to manage the reserve assets, ensuring that the stablecoin is redeemable for fiat.
Kraken co-CEO Arjun Sethi suggests that “the lack of competition” has hindered the stablecoin industry from realizing its full potential, which USDG will help rectify by offering a more equitable model to lure mainstream participants and “accelerate new use cases.”
The consortium plans to support the global adoption of the stablecoin and “incentivize the development of both crypto and broader financial solutions involving USDG,” the announcement indicates.
It aims to bring in new members across sectors, including custodians, exchanges, payment fintechs, merchants, protocols, card networks, banks, and investment platforms, although it’s presently in an invite-only phase.
Consortium participants will earn rewards generated from the yield on USDG’s reserve assets, based on their contributions to enhancing the network’s utility and connectivity.
USDG is currently accessible to users on Anchorage Digital, Galaxy Digital, Kraken, and Paxos, with plans to expand across all distribution partners soon.
As Paxos’s second localized stablecoin offering, USDG aims to compete with established entities like Tether and Circle. The former currently dominates the stablecoin market by a significant margin in terms of both volume and market cap.
The competition is anticipated to intensify with Ripple, a significant player in the blockchain payments sector, on track to deploying RLUSD, a dollar-pegged stablecoin backed with U.S. dollar deposits, U.S. government bonds, and cash equivalents.
Additionally, multinational payments firm Stripe is also considering an entry into the market with its recent acquisition of stablecoin provider Bridge.
