Kraken, Galaxy Digital, and Robinhood Back USDG Stablecoin via New Global Dollar Network

A group of major cryptocurrency and finance firms, including Kraken, Galaxy Digital, and Robinhood, has come together to support the launch of USDG, a new regulated, yield-bearing stablecoin. The coin is part of the Global Dollar Network, a consortium led by Paxos, the stablecoin issuer behind the project.

According to an announcement made on November 5, Paxos, in collaboration with Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, and Robinhood, has unveiled the Global Dollar Network, designed to promote the adoption of USDG, a dollar-backed stablecoin. The initiative was launched on October 31 with the stablecoin being issued in Singapore.

USDG: A Regulated, Yield-Bearing Stablecoin

USDG is a fully regulated stablecoin backed by a diverse set of assets, including U.S. dollar deposits, short-duration U.S. government securities, and other cash equivalents. The stablecoin is designed to comply with Singapore's new stablecoin regulatory framework and is supervised by the Monetary Authority of Singapore (MAS).

Developed by Paxos Digital Singapore, the project is a localized offering that initially operates on the Ethereum blockchain but has plans for future expansion to other blockchains as stablecoin regulations evolve worldwide. DBS Bank, Singapore’s largest bank, has been selected by Paxos as the custody partner to manage USDG’s reserve assets, ensuring that the stablecoin remains fully redeemable for fiat currency.

Aiming to Improve the Stablecoin Landscape

Kraken co-CEO Arjun Sethi highlighted that one of the major barriers to the growth of the stablecoin industry has been the lack of competition, which USDG intends to address. Sethi believes that USDG will offer a more equitable model that can attract mainstream participants and drive new use cases for stablecoins.

The Global Dollar Network’s objective is to facilitate global adoption of USDG and encourage the development of both crypto and traditional financial solutions that incorporate the stablecoin. The consortium is also focused on growing the ecosystem, planning to onboard new members from sectors such as custodians, exchanges, payment fintechs, merchants, protocols, card networks, banks, and investment platforms. The network is currently in an invite-only phase, with plans to expand further.

Incentives for Network Expansion

Members of the Global Dollar Network will be able to earn rewards based on the yield generated from USDG’s reserve assets. These rewards will be distributed to participants based on their contributions to expanding the stablecoin’s utility and network connectivity.

At present, USDG is available to users on platforms such as Anchorage Digital, Galaxy Digital, Kraken, and Paxos. Expansion to other distribution partners is already in the works.

USDG Competes with Established Stablecoin Leaders

As the second localized stablecoin offering from Paxos, USDG is entering a competitive market dominated by Tether (USDT) and USD Coin (USDC). Tether remains the market leader in both volume and market capitalization, but USDG aims to capture market share by offering an innovative, yield-bearing product backed by secure, liquid assets.

The competition in the stablecoin space is intensifying, with Ripple preparing to launch its own stablecoin, RLUSD, backed by U.S. dollar deposits, government bonds, and cash equivalents. Additionally, global payments firm Stripe is eyeing a future entry into the stablecoin market through its recent acquisition of stablecoin provider Bridge.

The Growing Stablecoin Market

The stablecoin market is experiencing rapid innovation as traditional financial institutions and tech companies eye opportunities in digital currency. As USDG becomes available to a broader user base, it will face stiff competition from both existing market leaders and emerging players like Ripple and Stripe.

The Global Dollar Network, with its powerful backing from major cryptocurrency and financial firms, is positioning USDG as a key player in this evolving landscape. As the regulatory environment for stablecoins continues to take shape, USDG’s yield-bearing model and strategic partnerships could set it apart from the competition and drive its adoption in both crypto and traditional financial markets.