A consortium has been formed, which includes Paxos, Robinhood, Kraken, and other crypto companies, for the launch of a new stablecoin pegged to the US dollar.
The stablecoin will be called Global Dollar, and it will be based on the open network Global Dollar Network.
https://twitter.com/Paxos/status/1853561410615210003
The new stablecoin by Robinhood, Kraken, and Paxos
Global Dollar does not exist yet, but its website GlobalDollar.com already does.
It will be launched on the crypto markets with the ticker USDG.
Its smart contract has already been launched on the Ethereum blockchain, and it has been stated that initially about 10 million USDG tokens will be issued.
It will be a stablecoin fully backed by real dollars (USD), and it will be completely redeemable from Paxos at par in USD.
Paxos is a regulated stablecoin issuer with a lot of experience, having already issued more than 160 billion dollars in stablecoins since 2018.
Furthermore, Paxos will publish monthly reports on the reserves of USDG, as it already does for all the other stablecoins it has issued.
The price of 1 USDG will always be more or less 1$.
The Global Dollar Network: the network for the new stablecoin of Robinhood, Kraken, and Paxos
Global Dollar Network is an open network that aims to accelerate and reward the global adoption of stablecoins. It is led by Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and Robinhood.
Currently, an invitation phase has been initiated, open to other qualified participants, including custodians, exchanges, payment fintech, protocols, card networks, banks, and investment platforms, allowing them to join the Global Dollar Network to support the project.
Global Dollar Network was created to revolutionize the stablecoin market, offering a reliable and regulated stablecoin.
In particular, USDG will comply with the upcoming stablecoin framework of the Monetary Authority of Singapore, where Paxos is headquartered.
Furthermore, it promises to share with the token holders any rewards obtained from the Network with the USA in custody.
The main banking partner, at the time of the launch, for liquidity management and custody of reserves will be DBS Bank, the largest bank in Southeast Asia by assets, and recognized by Global Finance for 16 consecutive years as the safest bank in Asia.
Robinhood and Kraken
In addition to Paxos, the two big names that have joined this project are Robinhood, Kraken, as well as Galaxy Digital.
Robinhood and Kraken are both trading platforms (exchange), and they have millions of crypto users.
Robinhood allows Americans to invest without account minimums through its free app. It is also present in the European market.
Furthermore, it is a company registered as a financial operator in the USA.
Kraken is one of the longest-standing crypto exchanges in the world, and it is now the second-largest exchange in the USA by volume.
Its crypto platform was founded as early as 2011, and it was among the first to offer spot trading with margin, parachain auctions, staking, and regulated derivatives.
The stablecoin sector
The stablecoin sector is dominated worldwide by USDT from Tether and USDC from Circle.
Circle is an American company that operates in collaboration with the main US crypto exchange, Coinbase.
Tether, on the other hand, does not have a precise location, even though by holding enormous amounts of US public debt, it is effectively a company subject to US regulation.
Beyond these two main stablecoins, there are others, including USDS (formerly DAI) and USDE, but on their own, USDT and USDC account for almost 90% of the entire stablecoin market.
Some time ago, another American giant, PayPal, tried to launch its own stablecoin (PYUSD), but it did not achieve great success, at least for now.
It is not certain, therefore, that it will be easy for USDG to carve out a leading role in this market, even if the support of Kraken, and especially of Robinhood, could make the difference.
The comment
The co-founder and CEO of Paxos, Charles Cascarilla, stated:
“Stablecoins are relaunching the financial system and revolutionizing the way people interact with dollars and U.S. payments. However, the main stablecoins are not regulated and maintain all economic reserves. Global Dollar Network will return virtually all rewards to participants and is open to anyone who wants to join. It is designed to incentivize the global use of stablecoins and accelerate the adoption of this technology by society”.
The GM and VP of Robinhood Crypto, Johann Kerbrat, added:
“It has been demonstrated that stablecoins offer a bridge between traditional finance and cryptocurrencies, enabling faster, cheaper, and more efficient transactions. We are pleased to support the efforts of the Global Dollar Network to expand these opportunities, which align with our commitment to making financial access easier and more inclusive”.
The Co-CEO of Kraken, Arjun Sethi, commented saying:
“The lack of competition in the regulated stablecoin market has prevented the sector from reaching its full potential. USDG flips this dynamic with a fairer model that will bring mainstream participants into the ecosystem and accelerate new use cases for stablecoins”.