Seven leading cryptocurrency companies have joined forces to introduce the Global Dollar (USDG), a new U.S. dollar-pegged stablecoin aimed at enhancing stablecoin adoption worldwide.
With a focus on interoperability and regulatory compliance, the USDG is positioned to streamline the stablecoin landscape while rewarding its network partners by redistributing nearly all revenue generated from its reserve assets.
A MAS-compliant stablecoin to drive innovation
The USDG stablecoin pegged to the U.S. dollar at a 1:1 ratio, complies with Monetary Authority of Singapore (MAS) standards and is structured as a single-currency stablecoin (SCS). Designed as an interoperable digital asset, USDG will support open-source smart contracts, allowing developers to build new products and services around it. Beginning on November 5, 2023, a broad range of businesses, including merchants, investment platforms, custodians, payment providers, banks, and exchanges, will be able to join the Global Digital Network. This collaborative ecosystem aims to foster innovative global money movement solutions through USDG’s use as a building block for financial applications.
A unique model to reward and attract partners
Unlike traditional stablecoins that typically retain the economic benefits of their reserve assets, the Global Digital Network has structured USDG to offer up to 100% of the returns on its backing assets to network partners. This approach is intended to drive higher levels of adoption by creating direct incentives for participants, setting USDG apart from competitors. The network leverages the strengths of each partner to meet consumer protection and industry standards while encouraging more widespread use of stablecoins.
Anchorage Digital CEO Nathan McCauley highlighted USDG’s potential for cross-border and peer-to-peer transactions, stating that institutions could benefit from faster settlements and earn rewards on USDG deposits. The Global Dollar Network will be guided by an advisory committee with representatives from partner organizations, ensuring solutions that meet global enterprise requirements while encouraging innovation and collaborative growth across sectors.
Industry leaders endorse USDG’s role in financial system evolution
Industry figures, including Paxos CEO Charles Cascarilla and Kraken Co-CEO Arjun Sethi, have endorsed USDG’s mission to reshape the stablecoin landscape. Cascarilla pointed out that many established stablecoins remain unregulated and monopolize the returns from reserve assets, limiting the benefits to a single issuer. In contrast, USDG’s revenue-sharing model promotes stablecoin adoption by incentivizing broader financial participation. Sethi emphasized that the limited competition in regulated stablecoins has restricted the industry’s potential, and USDG’s entry could address this gap.
According to Robinhood Crypto’s General Manager Johann Kerbrat, USDG is set to revolutionize how people interact with payments and the U.S. dollar by bridging traditional finance and cryptocurrency. Bullish CEO Tom Farley echoed this sentiment, viewing USDG as a critical asset in bridging the gap between conventional financial systems and digital currencies. Paxos further asserted that USDG’s model offers significant opportunities for custodians, exchanges, and investment platforms, providing a low-cost, secure alternative in the stablecoin market.
Invitation-only launch with broader access planned
Initially, the Global Dollar Network will be accessible only by invitation, with plans to expand access to all eligible participants shortly. This phased approach allows the network to establish a solid foundation and ensure adherence to strict regulatory and security standards before broadening its user base.
The USDG stablecoin represents a significant shift in the approach to stablecoin economics, providing equitable rewards to network participants and aiming to accelerate stablecoin adoption globally. As the Global Dollar Network expands, USDG’s supporters believe it will play an essential role in the evolution of digital finance by making U.S. dollar-pegged digital assets more accessible and attractive across the financial ecosystem.