Paxos Ups Its Stablecoin Bet: Launches MAS-Compliant USDG

Friday, 01/11/2024 | 05:20 GMT by Arnab Shome
  • The new stablecoin complies with Singapore’s upcoming framework.
  • Initially, it will be available on the Ethereum blockchain, with plans to extend to other blockchains.
paxos

Paxos has expanded its stablecoin offerings with the launch of Global Dollar (USDG), a US dollar-backed stablecoin that aligns with Singapore’s upcoming stablecoin regulations. The company claims that this stablecoin is “designed to support the needs of regulated institutions.”

A Regulatory-Compliant Stablecoin

Announced today (Friday), Paxos’ Singapore-based subsidiary, which is regulated by the Monetary Authority of Singapore (MAS), is the issuer of the new stablecoin. The company will partner with global exchanges, wallets, and platforms for the distribution of the stablecoin to individuals and institutions.

Initially, USDG will be available on the Ethereum blockchain, but the company plans to issue it on additional blockchains in the near future.

“Enterprise interest in stablecoins has never been higher than it is today,” said Ronak Daya, Head of Product at Paxos, “but the market lacks a solution that combines regulatory compliance with real economic incentives for enterprises.”

Maintaining 1:1 Parity

Paxos further clarified that it must back the new stablecoin with “only high-quality liquid assets,” including US dollar deposits, short-term US Government securities, and other cash equivalents. The stablecoin issuer is also required to maintain a 1:1 parity with the US dollar, allowing holders to redeem their tokens for fiat currency at any time.

The announcement also revealed that Paxos has partnered with Singapore’s DBS Bank as its banking partner for cash management and custody of USDG reserves.

Currently, the stablecoin industry is dominated by Tether and Circle. However, the potential of the industry, along with regulatory changes, has encouraged established financial services players to enter this market.

Robinhood and Revolut, two prominent companies in the mainstream financial services industry, are now considering issuing their own stablecoins. Although this is not officially confirmed, the two companies reportedly aim to address the gap in Europe created by the stablecoin regulations under the Markets in Crypto-Assets Regulation (MiCA).

Meanwhile, Ripple, known for its blockchain-based cross-border payment infrastructure, has also launched a stablecoin, and the UAE recently approved a dirham-pegged stablecoin.

Paxos has expanded its stablecoin offerings with the launch of Global Dollar (USDG), a US dollar-backed stablecoin that aligns with Singapore’s upcoming stablecoin regulations. The company claims that this stablecoin is “designed to support the needs of regulated institutions.”

A Regulatory-Compliant Stablecoin

Announced today (Friday), Paxos’ Singapore-based subsidiary, which is regulated by the Monetary Authority of Singapore (MAS), is the issuer of the new stablecoin. The company will partner with global exchanges, wallets, and platforms for the distribution of the stablecoin to individuals and institutions.

Initially, USDG will be available on the Ethereum blockchain, but the company plans to issue it on additional blockchains in the near future.

“Enterprise interest in stablecoins has never been higher than it is today,” said Ronak Daya, Head of Product at Paxos, “but the market lacks a solution that combines regulatory compliance with real economic incentives for enterprises.”

Maintaining 1:1 Parity

Paxos further clarified that it must back the new stablecoin with “only high-quality liquid assets,” including US dollar deposits, short-term US Government securities, and other cash equivalents. The stablecoin issuer is also required to maintain a 1:1 parity with the US dollar, allowing holders to redeem their tokens for fiat currency at any time.

The announcement also revealed that Paxos has partnered with Singapore’s DBS Bank as its banking partner for cash management and custody of USDG reserves.

Currently, the stablecoin industry is dominated by Tether and Circle. However, the potential of the industry, along with regulatory changes, has encouraged established financial services players to enter this market.

Robinhood and Revolut, two prominent companies in the mainstream financial services industry, are now considering issuing their own stablecoins. Although this is not officially confirmed, the two companies reportedly aim to address the gap in Europe created by the stablecoin regulations under the Markets in Crypto-Assets Regulation (MiCA).

Meanwhile, Ripple, known for its blockchain-based cross-border payment infrastructure, has also launched a stablecoin, and the UAE recently approved a dirham-pegged stablecoin.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6644 Articles
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