Kraken, Galaxy Digital, and Robinhood back USDG via Global Dollar Network

Leading cryptocurrency-focused firms such as Kraken, Galaxy Digital, and Robinhood have joined forces to support Global Dollar, a regulated yield-generating stablecoin developed by stablecoin issuer Paxos.

Announced on Nov. 5, Paxos has launched the Global Dollar Network, a consortium supporting USDG, a dollar-backed stablecoin launched in Singapore, in partnership with Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei and Robinhood. .

Launched on October 31, USDG is backed by reserves consisting of liquid assets such as US dollar deposits, short-term US Government bonds and other cash equivalents. The stablecoin is compatible with Singapore’s upcoming stablecoin framework and is regulated by the Monetary Authority of Singapore.

Developed by Paxos Digital Singapore, the local arm of Paxo, the stablecoin is currently limited to the Ethereum blockchain but there are plans to expand to other networks and expand globally as stablecoin regulations evolve.

As its custodial partner, Paxos leveraged Singapore’s largest bank, DBS, to manage its reserve assets, which enables the stablecoin to be converted into fiat money.

According to Kraken co-CEO Arjun Sethi, a “lack of competition” has prevented the stablecoin industry from reaching its full potential; USDG will help fix this by providing a fairer model to attract mainstream participants and “accelerate new use cases.”

The announcement states that the consortium will support global adoption of the stablecoin and “encourage the development of broader financial solutions that include both crypto and USDG.”

Although currently in an invitation-only phase, it plans to onboard new members from industries including custodians, exchanges, payment fintechs, merchants, protocols, card networks, banks and investment platforms.

Participants in the consortium will earn rewards derived from the return on USDG’s reserve assets based on their contributions to expanding the availability and connectivity of the network.

USDG is currently available to users on Anchorage Digital, Galaxy Digital, Kraken, and Paxos, with plans to expand to all distribution partners soon.

Paxos’ second localized stablecoin offering, USDG, aims to compete with established players like Tether and Circle. The first of these currently leads the stablecoin market by a wide margin in terms of both volume and market cap.

Competition is expected to intensify further as Ripple, a leading player in the blockchain payments industry, rolls out RLUSD, a dollar-pegged stablecoin backed by US dollar deposits, US government bonds and cash equivalents.

Additionally, multinational payments company Stripe is also planning to enter the market soon by acquiring stablecoin provider Bridge.