A consortium of prominent figures in the cryptocurrency industry is supporting a new regulation-centric stablecoin known as the Global Dollar (USDG). This initiative seeks to provide returns on the yield generated from its reserve assets to those who contribute to its growth and adoption.
Named the Global Dollar Network, the initial partners include Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and Robinhood.
The USDG stablecoin is being issued from Singapore by Paxos and is described as “substantively compliant” with the forthcoming stablecoin framework of the Monetary Authority of Singapore, as stated in a press release.
“Our goal with this token is to foster a true community,” stated Charles Cascarilla, CEO of Paxos, during an interview. “Everyone is welcome to join the Global Dollar Network and earn rewards for their participation. We are distributing approximately 97% of the economics, which marks a significant shift from how other stablecoins have traditionally been structured and created.”
The market for stablecoins is quite substantial, primarily controlled by two major players: Tether, with its (USDT), the leading stablecoin by a considerable margin, and Circle with its (USDC). In contrast to the new USDG, both Tether and Circle keep all the interest accrued from their reserves. There are also other yield-sharing stablecoins and intriguing innovations at the protocol level, such as those from the M^0 project.
According to Cascarilla, income generated from the reserves of USDG, which are primarily invested in U.S. Treasuries like many other stablecoins, will be distributed among participants. This distribution will depend on how these firms enhance connectivity and liquidity within the network.
“We have structured this so that participants receive rewards for engaging in activities that promote the network’s utility,” he emphasized. “There are various ways to earn these rewards; different participants may be compensated in unique methods because not everyone performs the same tasks, which is essential for a vibrant ecosystem.”
Instead of focusing on end users of the platform, the USDG stablecoin incentivizes participant companies to enhance its reach within the U.S. through its distribution partners, including Anchorage, which has a presence in all 50 states.
Upon launch, DBS Bank, recognized as Southeast Asia’s largest bank by assets, will take on the role of the primary banking partner, handling both cash management and custody for USDG reserves.
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