All You Need to Know About Global Dollar (USDG) Stablecoin

The Global Dollar Network is an open initiative to promote stablecoin adoption globally, anchored by the Global Dollar (USDG), a fully-backed, US dollar-pegged stablecoin issued by Paxos and compliant with regulatory standards. Learn about USDG's features, regulatory framework, and the benefits it brings to global stablecoin adoption.

Global Dollar Network introduces USDG, a fully-backed, US dollar-pegged stablecoin developed for secure, regulated digital transactions.
Launched on November 1, 2024, USDG supports seamless, low-cost global transactions 24/7, bridging traditional finance and crypto.
The network includes leading financial and tech companies aiming to drive stablecoin adoption and use cases.
USDG complies with the Monetary Authority of Singapore (MAS) framework, ensuring security and trustworthiness in the digital finance landscape.

The Global Dollar Network (GDN) is an open, enterprise-driven initiative, launched on November 1, 2024 on the Ethereum blockchain and focused on accelerating stablecoin adoption worldwide. Developed by leaders in digital finance and blockchain infrastructure, the GDN aims to provide enterprises with a trusted, fully-backed digital asset to facilitate global payments, drive digital currency adoption, and streamline international transactions.

Through collaboration with key players like Paxos, Robinhood, Galaxy Digital, Kraken, and others, the GDN is designed to address gaps in the current stablecoin market by offering a compliant, secure, and transparent alternative to traditional payment methods. The Global Dollar (USDG) is the network's core asset—a US dollar-backed stablecoin that supports reliable, cost-effective digital transactions globally.

Global Dollar (USDG) is the foundational stablecoin of the Global Dollar Network. Developed by Paxos Digital Singapore Pte. Ltd., USDG is pegged 1:1 to the US dollar and serves as a safe and stable digital representation of the dollar. With regulatory oversight from the Monetary Authority of Singapore (MAS), USDG is structured to meet stringent financial compliance standards, providing users and enterprises with a trusted, stable, and secure digital currency for transactions across borders.

As of its launch, USDG is available on the Ethereum blockchain as an ERC-20 token. Paxos plans to expand USDG's availability to additional blockchains in the near future, pending regulatory approvals.

USDG is designed to support a wide array of financial applications. It’s especially well-suited for companies seeking an easy, reliable way to integrate blockchain technology into their payment systems and for individuals wanting a stable asset for trading, remittances, and day-to-day transactions in the digital finance ecosystem.

Key Features of Global Dollar (USDG)

Here’s a look at the key features of the USDC stablecoin, which could make it a formidable new entrant in the stablecoin sector currently dominated by Tether (USDT) and USD Coin (USDC):

Stable and Secure: USDG is a stablecoin fully backed by US dollar deposits, short-term US government securities, and other high-quality liquid assets, ensuring that each USDG token maintains a 1:1 value with the US dollar. This stable value is crucial for those looking to avoid the volatility commonly associated with cryptocurrencies while still accessing the benefits of digital assets.
Regulatory Compliance: USDG is compliant with Singapore’s MAS stablecoin framework, positioning it as a regulated, secure digital asset. This regulatory compliance reinforces USDG’s credibility, offering peace of mind to users concerned about the regulatory risks associated with some other stablecoins.Paxos Digital Singapore, the issuer of USDG, operates under the MAS’s Major Payment Institution (MPI) license. This allows Paxos to meet Singapore's stringent financial standards, aligning with international norms and providing an extra layer of security and reliability to USDG holders.
Transparency and Accountability: One of the most distinguishing features of USDG is Paxos’s commitment to transparency. Paxos publishes monthly reserve reports to ensure that USDG is fully backed at all times, enabling users to verify the stablecoin’s solvency directly. These reports are essential for maintaining public trust, allowing users to confirm that their assets are securely backed by real financial reserves.

The Global Dollar Network’s mission is supported by a diverse group of leading institutions across finance and digital assets. These partners contribute resources, expertise, and user bases to ensure the successful adoption and use of USDG globally. Notable GDN partners include:

Anchorage Digital: Provides secure custody, staking, trading, and other services for institutional crypto clients.
Robinhood: Known for its mission to democratize finance, Robinhood offers a user-friendly interface and affordable investment options, including USDG.
Kraken: A long-standing crypto exchange, Kraken adds credibility and reach to USDG’s global adoption.
Galaxy Digital: As a financial services and investment management firm, Galaxy Digital brings institutional experience and insights to the GDN.
Nuvei: A global payment technology provider, Nuvei facilitates the seamless integration of USDG into various online payment systems.
Bullish: A regulated exchange known for its transparency and innovative trading mechanisms, Bullish supports liquidity and compliance within the GDN ecosystem.

These partners work together to promote the stablecoin's reliability, increase its usability, and support a trusted, low-cost alternative to traditional financial systems. They are committed to improving access to stable digital assets, creating a more inclusive and efficient global financial landscape.

USDG stands out from other stablecoins in several key ways:

Transparent Reserves: Unlike some stablecoins, which do not disclose the full backing of their assets, USDG is fully backed by high-quality reserves, and Paxos publishes monthly reserve audits for transparency.
Equitable Revenue Model: While some stablecoins retain most or all of the interest generated from their reserves, the GDN adopts an equitable revenue-sharing model. Partners within the network can earn up to 100% of the yield generated from USDG’s reserves, making the ecosystem more attractive and incentivizing broad adoption and use.
Institutional-Grade Compliance: Paxos is a pioneer in regulated stablecoin issuance, with experience in minting over $160 billion in stablecoins since 2018. USDG is designed to meet the highest regulatory standards, especially under Singapore’s MAS framework, making it a trusted asset for institutions and individuals alike.

Learn more about the differences between USDT and USDC.

USDG offers flexibility and multiple use cases across different types of transactions. Here’s how USDG can be used in various scenarios:

1. Seamless Payments and Transfers

USDG simplifies cross-border payments and offers an accessible way to send money globally. With USDG, users can make transactions in a fraction of the time and at a much lower cost than traditional bank transfers. This is especially beneficial for enterprises seeking to optimize cash flow and reduce transaction fees in their global operations.

2. Trading and Hedging

Traders and investors can use USDG as a stable asset in times of high market volatility. By holding a stablecoin like USDG, they can avoid the price fluctuations of other cryptocurrencies and maintain a secure digital asset within their portfolios.

3. Accessing Decentralized Finance (DeFi) Platforms

USDG is available on the Ethereum blockchain as an ERC-20 token, enabling compatibility with various DeFi platforms. Users can stake USDG, participate in lending and borrowing, or use it as collateral in smart contracts to earn yields, enhancing their investment opportunities in the digital finance ecosystem.

4. Payment Option for Merchants

Merchants can accept USDG for online purchases, bypassing the high fees associated with credit card processing. USDG’s stability and ease of integration make it a practical solution for e-commerce and digital merchants looking to adopt cryptocurrency payments.

5. Remittances

USDG provides a cost-effective way to send remittances worldwide. Unlike traditional remittance services that may take days, USDG transactions are completed within minutes, with fewer fees and greater convenience for both the sender and the receiver.

The launch of Global Dollar (USDG) comes at a time when demand for stable digital currencies is surging. With over $160 billion in stablecoin issuance to date, Paxos is well-positioned to expand the use of USDG across both traditional and digital financial landscapes. USDG’s transparent, fully-backed reserves make it an attractive choice for businesses, developers, and consumers alike.

Potential Impact on Global Adoption of Stablecoins

Stablecoin market dominance | Source: DefiLlama

The global stablecoin market has grown substantially, with a market cap exceeding $177 billion as of November 2024. Heavyweight players like Tether (USDT) and Circle’s USD Coin (USDC) have dominated this space, accounting for a significant portion of the market share due to their established use cases and large trading volumes. Tether, the largest stablecoin, boasts a market cap of over $120 billion, while USD Coin follows with around $35 billion, both experiencing consistent growth due to high adoption across exchanges, decentralized finance (DeFi) platforms, and payment applications.

Despite their strong market position, these stablecoins have faced challenges related to transparency, regulatory scrutiny, and limited incentives for institutional partners. This opens opportunities for new, transparent, and compliant stablecoins like Global Dollar (USDG) to carve out a space in the market.

How USDG Could Establish Its Position in the Stablecoin Market

Global Dollar (USDG), introduced by Paxos as the core asset of the Global Dollar Network, has a unique model that addresses both compliance and value-sharing. Here’s how USDG might build its competitive position:

Increased Institutional Adoption: USDG’s regulatory compliance with the Monetary Authority of Singapore (MAS) framework provides a solid foundation for institutional adoption. For many institutions hesitant to adopt unregulated or high-risk digital assets, USDG offers a transparent, fully-backed stablecoin that meets high regulatory standards. This added security could appeal to businesses and financial institutions looking for stable, reliable digital assets, encouraging them to participate in the digital finance ecosystem with reduced risk exposure.
Greater Accessibility and Inclusion: USDG offers a stable, globally accessible digital asset that could serve underbanked populations, particularly in regions where access to traditional banking services is limited. By providing a regulated, stable currency on permissionless blockchains like Ethereum, USDG can support financial inclusion, offering users worldwide a secure option for payments, remittances, and savings without relying on local banking infrastructure.
Competitive Landscape for Stablecoins: One of USDG’s standout features is the revenue-sharing model of the Global Dollar Network. Unlike other stablecoins, which often retain most of the revenue from their reserve assets, the GDN shares up to 100% of the generated yields with its partners. This makes USDG particularly appealing to enterprises and exchanges, potentially challenging the dominance of stablecoins like Tether and USDC by incentivizing a broader ecosystem of supporters and users.
Innovation in Blockchain Technology: The Global Dollar Network fosters collaboration with developers and tech companies to expand USDG’s applications. As an ERC-20 token, USDG is interoperable with a wide range of DeFi platforms, wallets, and decentralized applications. Additionally, Paxos plans to extend USDG to more blockchain networks, enhancing its flexibility and use cases. By supporting developers in creating new tools and use cases for USDG, the GDN could drive innovation in DeFi, Web3, and cross-border payments, enhancing USDG’s relevance and utility in the fast-evolving digital economy.

In summary, USDG’s emphasis on regulatory compliance, transparency, economic incentives for partners, and focus on innovation positions it as a strong contender in the stablecoin landscape. Its ability to bridge traditional finance and digital assets could make it a valuable player in the stablecoin market, supporting broader adoption while fostering a more inclusive global financial system.

Singapore’s Monetary Authority (MAS) has established a stringent regulatory framework for digital payment tokens, making it a global leader in digital asset regulation. By aligning with MAS’s standards, USDG gains an edge over other stablecoins that lack similar regulatory oversight. This compliance enhances its appeal, particularly to institutions and businesses seeking a stable, regulated digital currency.

With MAS’s support, USDG stands as a safe and reliable choice for enterprises that prioritize security and compliance. It also sets a precedent for stablecoins worldwide, signaling a shift toward greater regulatory clarity and improved consumer protections in the stablecoin market.

Paxos, a leader in blockchain infrastructure and tokenization, has been at the forefront of stablecoin innovation since 2018. Paxos was the first company to receive a limited-purpose trust charter from the New York Department of Financial Services (NYDFS), allowing it to operate under stringent regulatory oversight.

Paxos’s reputation for regulatory compliance and financial stability has made it a trusted partner for global institutions. In addition to USDG, Paxos has issued other stablecoins, including:

Pax Dollar (USDP): A US dollar-backed stablecoin approved by the NYDFS.
PayPal USD (PYUSD): A stablecoin developed in partnership with PayPal, offering PayPal users a safe way to transact in digital currencies.
Lift Dollar (USDL): Issued out of the UAE, this yield-bearing stablecoin is backed by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi.

With USDG, Paxos continues its mission to create secure, regulated digital assets that can bridge the gap between traditional finance and blockchain technology.

Learn more about PayPal USD (PYUSD) and how it works.

The Global Dollar Network and its USDG stablecoin mark a significant advancement in the stablecoin industry, offering a trusted, fully-backed digital currency that combines regulatory oversight, economic incentives, and enhanced usability. As the GDN expands, enterprises, developers, and users stand to benefit from a stablecoin that promotes transparency, security, and global accessibility.

For businesses and individuals looking to leverage digital assets without sacrificing stability or security, USDG provides a robust, compliant alternative. By joining the Global Dollar Network, companies can participate in a collaborative ecosystem that fosters stablecoin adoption, drives innovation, and contributes to a more inclusive financial future.