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Paxos has expanded its stablecoin offerings with the launch of Global Dollar (USDG), a US dollar-backed stablecoin that aligns with Singapore’s upcoming stablecoin regulations. The company claims that this stablecoin is “designed to support the needs of regulated institutions.”
A Regulatory-Compliant Stablecoin
Announced today (Friday), Paxos’ Singapore-based subsidiary, which is regulated by the Monetary Authority of Singapore (MAS), is the issuer of the new stablecoin. The company will partner with global exchanges, wallets, and platforms for the distribution of the stablecoin to individuals and institutions.
Initially, USDG will be available on the Ethereum blockchain, but the company plans to issue it on additional blockchains in the near future.
“Enterprise interest in stablecoins has never been higher than it is today,” said Ronak Daya, Head of Product at Paxos, “but the market lacks a solution that combines regulatory compliance with real economic incentives for enterprises.”
(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
Maintaining 1:1 Parity
Paxos further clarified that it must back the new stablecoin with “only high-quality liquid assets,” including US dollar deposits, short-term US Government securities, and other cash equivalents. The stablecoin issuer is also required to maintain a 1:1 parity with the US dollar, allowing holders to redeem their tokens for fiat currency at any time.
The announcement also revealed that Paxos has partnered with Singapore’s DBS Bank as its banking partner for cash management and custody of USDG reserves.
Currently, the stablecoin industry is dominated by Tether and Circle. However, the potential of the industry, along with regulatory changes, has encouraged established financial services players to enter this market.
Robinhood and Revolut, two prominent companies in the mainstream financial services industry, are now considering issuing their own stablecoins. Although this is not officially confirmed, the two companies reportedly aim to address the gap in Europe created by the stablecoin regulations under the Markets in Crypto-Assets Regulation (MiCA).
Meanwhile, Ripple, known for its blockchain-based cross-border payment infrastructure, has also launched a stablecoin, and the UAE recently approved a dirham-pegged stablecoin.
This article was written by Arnab Shome at www.financemagnates.com.
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