Key Takeaways:
Fintech and digital asset heavyweights, consisting of Robinhood, Kraken, Galaxy Digital, and Paxos, have joined forces to introduce a new stablecoin pegged to the US dollar, called the Global Dollar (USDG).
Paxos, Robinhood, and Galaxy Digital Introduce USDG Coin to Revolutionalize the Stablecoin Market
The Global Dollar Network aims to enhance the stablecoin market by lowering transaction costs, boosting consumer protections, and facilitating cross-border transactions with rewards for participants who help accelerate its adoption.
The original partners of the Global Dollar Network are Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and Robinhood. The protocol will utilize the Global Dollar token (USDG), issued by Paxos, which will comply with the Monetary Authority of Singapore’s upcoming framework for fiat currency-denominated cryptocurrencies, otherwise known as stablecoins.
In an interview, Paxos CEO Charles Cascarilla said the USDG coin is meant to serve as a community token. He also noted that anybody could join the Global Dollar Network and accrue rewards for their activity. Interestingly, Paxos will be distributing around 97% of the economics, which is radically different from how other stablecoins have been set up and created to date, said Cascarilla.
Stablecoins are the most traded cryptocurrencies in the market as they are designed to minimize price volatility, making them suitable for everyday transactions and financial applications on the blockchain. Tether USD (USDT) is by far the largest stablecoin, with a market capitalization of $120 billion and a trading volume of $61.85 million at press time, followed by Circle and its USDC stablecoin, which has a market cap of $35 billion and a trading volume of $6.63 billion.
Together, Tether USD and the USD Coin account for nearly 90% of the total market capitalization of fiat-denominated cryptocurrencies.
USDG will be Available in all 50 US States Via the Kraken Crypto Exchange
Unlike the soon-to-be-launched USDG coin, both USDC and USDT retain all the interest from their reserves. Income generated from USDG’s US Treasury reserves will be shared among Global Dollar Network participants based on the way the partner firms can create connectivity and liquidity, but there are no rewards for the end user.
The USDG stablecoin will be available in all 50 US states through the platforms of its distribution partners Anchorage Digital, Galaxy Digital, Kraken, and Paxos. DBS bank will serve as the primary banking partner for the Global Dollar Network at launch as a cash management and custody agent of USDG reserves.
The move comes as industry leaders anticipate the US government warming up to crypto assets, regardless of who wins the Presidential election on Tuesday. Cascarilla said the Global Dollar Network will return virtually all rewards to participants and is open for anyone to join. The protocol is designed to incentivize global stablecoin usage and accelerate the widespread of the technology.
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