cryptoglobe.com
Seven crypto and fintech companies announced the formation of a new stablecoin project called Global Dollar Network on November 4, 2024. The founding members are cryptocurrency custodian Anchorage Digital, crypto exchange Bullish, trading firm Galaxy Digital, crypto exchange Kraken, payments company Nuvei, regulated blockchain infrastructure provider Paxos, and retail trading platform Robinhood.
According to the press release issued by Paxos, the network’s stablecoin, called Global Dollar (USDG), will be issued in Singapore by Paxos. USDG is designed as a single-currency stablecoin pegged to the US dollar, with Paxos offering one-to-one redemption for US dollars. The project claims it will comply with the upcoming stablecoin regulatory framework from Singapore’s Monetary Authority. DBS Bank, which has been ranked as Asia’s safest bank for 16 consecutive years by Global Finance magazine, will handle cash management and custody services for USDG’s reserves.
According to the project’s website, Paxos has minted over $160 billion in stablecoins since 2018 and operates under oversight from multiple global regulatory bodies. The company says it will publish monthly reserve reports for USDG, as it does for its other stablecoins, to provide transparency about the backing assets.
The group claims existing stablecoins have two significant problems: they don’t meet enterprise-grade standards and consumer protection requirements, and they impose high costs on blockchain ecosystems through what the group describes as outdated business models. Their proposed solution involves distributing financial benefits proportionally among network partners rather than concentrating them with a single issuer – a model that currently dominates the stablecoin market.
Trading of USDG has already begun on four platforms: Anchorage Digital, Galaxy Digital, Kraken, and Paxos. The remaining founding partners plan to add USDG support, though specific launch dates weren’t disclosed. The network is accepting applications from potential new partners across multiple sectors, including custodians, exchanges, payment companies, merchants, blockchain protocols, card networks, banks, and investment platforms.
The project’s leadership made several statements about its potential impact.
Anchorage Digital’s CEO Nathan McCauley suggested stablecoins could enable faster peer-to-peer transfers, more efficient international payments, improved trading capabilities, and opportunities to earn rewards on certain stablecoin deposits. Kraken’s Co-CEO Arjun Sethi characterized the regulated stablecoin market as lacking competition and suggested USDG’s economic model could attract mainstream participants.
Paxos CEO Charles Cascarilla claimed stablecoins are transforming financial systems and changing how people interact with US dollars and payments. Robinhood Crypto’s GM Johann Kerbrat described stablecoins as a bridge between traditional finance and cryptocurrencies, citing potential benefits like faster and cheaper transactions.
Bullish CEO Tom Farley spoke about combining blockchain technology with regulatory oversight to build institutional confidence in digital assets:
“Trusted stablecoins are essential in bridging the gap between crypto and traditional markets. By combining the efficiency of blockchain technology with robust prudential oversight, institutions can confidently engage with digital assets. We are proud to support the launch of the Global Dollar Network and pleased to expand the number of trusted stablecoins available to Bullish customers with the introduction of USDG.“
Featured Image via Pixabay