Paxos Forms Consortium to Support New USDG Stablecoin Network

A swathe of traditional finance and crypto companies, including Robinhood, Galaxy Digital, Kraken, and Paxos, have formed a consortium supporting the latest

Blockchain infrastructure firm Paxos has announced the launch of a new “open network” designed to accelerate the adoption and use of stablecoins worldwide, according to a Nov. 5 statement from the firm.

The network will support the global adoption of Paxos’ USDG stablecoin, which was launched by the firm on Nov. 1. USDG is currently only available on the Ethereum blockchain, but Paxos said the stablecoin will be made available on other chains as regulations evolve.

Paxos will issue the USDG stablecoin out of Singapore, which the firm says is “substantially compliant” with the Monetary Authority of Singapore’s (MAS) upcoming stablecoin framework, established in August 2023.

According to Paxos, qualified entities, including custodians, exchanges, and fintech firms will be able to join the Global Dollar Network by way of invitation. The firm noted that the stablecoin’s US dollar backings will be reserved and managed by Singapore’s largest banking institution, DBS Bank.

USDG is backed 1:1 with the US dollar in dollar deposits, short-duration U.S. government securities, and other cash equivalents, ensuring users can redeem their tokens for fiat.

Speaking about the launch of USDG, Paxos’ head of product Ronak Daya said the DBS partnership will enable enterprise-level stablecoin adoption.

“Through DBS, enterprises can integrate USDG into their applications and workflows quickly and easily, reaching a vast network of businesses and consumers,” said Daya.

“DBS is delighted to support Paxos in their launch of USDG,” said DBS head of product for digital assets Eng-Kwok Seat Moey in a statement. “This partnership will enable DBS and our ecosystem partners to integrate USDG into their applications and workflows quickly and easily.”

Other digital asset offerings by Paxos include PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG).

The USDG stablecoin and its Global Dollar Network will launch in a market dominated largely by two major stablecoin issuers. Tether (USDT) and Circle’s USD Coin (USDC) respectively command 56% and 27% dominance of the stablecoin supply on Ethereum, according to DefiLlama data.

USDT accounts for 69.53% of the total $84 billion supply of stablecoins on Ethereum.