USDG: Global Dollar Network Launches Singapore-Based Stablecoin with Robinhood, Kraken Partnership

TLDR:

• New stablecoin USDG launched by major crypto companies including Robinhood, Kraken, and Paxos
• Based in Singapore and compliant with local regulatory framework
• 97% of reserve earnings will be shared among network participants
• DBS Bank will manage cash and custody of reserves
• Faces competition from Tether and USDC which control 90% of stablecoin market

A group of leading cryptocurrency companies unveiled a new stablecoin project on November 4, 2024, marking a fresh approach to digital dollar alternatives. The Global Dollar Network, featuring prominent names such as Robinhood, Kraken, and Paxos, launched USDG, a stablecoin that will share nearly all of its reserve earnings with network participants.

The initiative brings together seven founding partners: Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and Robinhood. Paxos, operating from Singapore, will serve as the issuer of the USDG token under the oversight of the Monetary Authority of Singapore’s upcoming regulatory framework.

[1/4] Introducing Global Dollar Network, an open network designed to accelerate and reward global stablecoin adoption, powered by Global Dollar (USDG). Initial partners incl. @Anchorage, @Bullish, @galaxyhq, @krakenfx, @Nuvei, @Paxos & @RobinhoodApp.

💻:https://t.co/RwFa3PmihB pic.twitter.com/6p2pdmyhNv

— Global Dollar Network (@global_dollar) November 4, 2024

Charles Cascarilla, CEO of Paxos, announced that the project will distribute approximately 97% of its economics to network participants. This marks a departure from existing stablecoin models, where issuers typically retain all interest earned from reserves.

DBS Bank, the largest bank by assets in Southeast Asia, has been selected as the primary banking partner for the project. The institution will handle cash management and custody services for USDG reserves, which will primarily consist of U.S. Treasury securities.

The Global Dollar Network aims to encourage adoption through a reward system based on participant activity. Unlike some crypto projects that focus on end-user rewards, USDG’s model targets companies that help build network connectivity and liquidity.

Network participation remains open to new members, with rewards distributed based on various types of network-building activities. The structure allows different participants to earn rewards through their unique contributions to the ecosystem.

The stablecoin will be available to U.S. users through the distribution networks of partners like Anchorage, which maintains operations across all 50 states. This accessibility could help drive adoption in the American market.

USDG enters a market dominated by two major players. Tether’s USDT and Circle’s USDC currently control nearly 90% of the total stablecoin market capitalization, according to data from CoinGecko.

The timing of the launch coincides with increased activity in the cryptocurrency market, as bitcoin prices have risen amid expectations of lower U.S. interest rates and new crypto exchange-traded products.

The project’s governance structure includes a committee composed of representatives from the network’s partner organizations, ensuring collaborative decision-making among stakeholders.

Stablecoins serve as a crucial bridge between traditional currencies and crypto assets, offering a way to convert between the two while avoiding the price volatility common in cryptocurrencies.

The launch comes as industry participants anticipate evolving regulatory attitudes toward digital assets in the United States, regardless of upcoming election outcomes.

USDG’s reserves will be backed by U.S. Treasuries, following a common practice among major stablecoin issuers to maintain stable value and generate yield.

The project represents one of several recent innovations in the stablecoin space, including yield-sharing models and protocol-level developments from projects like M^0.

The network partners aim to accelerate worldwide stablecoin adoption while providing proportionate economic benefits to participating organizations that contribute to the network’s growth and stability.