This new formation is supported by large companies such as Robinhood, Galaxy Digital, Kraken and Paxos. The aim of this consortium, which was established to support the USDG stablecoin pegged to the US dollar, was announced as bringing the use of stablecoins to wider audiences and improving the financial ecosystem.

In a statement made on Nov. 5, blockchain infrastructure firm Paxos announced that its new “open network” is designed to enable rapid adoption of stablecoins around the world.

Arjun Sethi, co-CEO of Kraken, also took part in the statement, stating that the lack of competition in the regulated stablecoin market is preventing the industry from reaching its potential. Sethi stated that USDG will reverse this dynamic, include mainstream participants in the ecosystem with a fairer model and accelerate the use of stablecoins.

This network, which was established to support the global adoption of the USDG stablecoin, launched by Paxos on November 1, is directly supported by the US dollar. Currently only available on the Ethereum blockchain, USDG will be available on other blockchain networks as regulations progress.

Paxos will launch its USDG stablecoin in Singapore and stated that the stablecoin is compatible with the stablecoin framework approved by the Monetary Authority of Singapore (MAS) in August 2023.

The USDG stablecoin is backed by reserves managed by DBS Bank, Singapore’s largest bank. In this way, the stablecoin can be exchanged for cash. Ronak Daya, Paxos’ product manager, stated that this partnership with DBS will encourage stablecoin adoption at the institutional level.

Qualified institutions such as depository institutions, stock exchanges and fintech companies can participate in the consortium by invitation. Thus, it is aimed to create a broader ecosystem in the sector.

It is stated that the Global Dollar Network offers its users the opportunity to use both a safe and regulated stablecoin with the USDG stablecoin.

Paxos emphasized that users can safely trade USDG and exchange the stablecoin for any fiat currency.

It was announced that stablecoins’ US dollar reserves are backed by reliable assets such as short-term US government bonds, cash equivalents and dollar deposits.

Paxos’ other digital asset solutions include products such as PayPal USD, Pax Dollar (USDP) and Pax Gold (PAXG). The USDG stablecoin and the Global Dollar Network will compete in a market largely dominated by leading stablecoin providers such as Tether and Circle’s USD Coin.

According to current data, Tether and Circle’s stablecoin solutions control 56% and 27% of the stablecoin supply on Ethereum, respectively.

Global Dollar Network aims to change the balance in the stablecoin market by paving the way for new areas of use.

Stablecoin solutions based on fiat currencies such as the US dollar are playing an important role in the adoption and use of cryptocurrencies in many industries. Paxos and the Global Dollar Network consortium aim to make this process more reliable, compatible and accessible.