Crypto Consortium Launches USDG Stablecoin to Expand Global Stablecoin Use

Guardian mag November 04, 2024

A group of financial technology and cryptocurrency companies, including Robinhood, Kraken, and Galaxy Digital, launched a new stablecoin pegged to the U.S. dollar on Monday.

The coalition, known as the Global Dollar Network, aims to increase global adoption of stablecoins, offering proportional economic rewards to its partners, according to a joint statement.

Why This Matters

Stablecoins are digital assets designed to maintain a steady value by being backed by traditional currencies like the U.S. dollar or euro.

As major cryptocurrencies such as Bitcoin have surged in value this year, largely due to lower expected U.S. interest rates and the introduction of new crypto exchange-traded products, companies have shown greater interest in promoting stablecoins.

They serve as a bridge between digital assets and traditional currencies, offering a more stable option for converting crypto holdings without the volatility associated with other cryptocurrencies.

Project Background

The Global Dollar Network will introduce a new stablecoin called USDG, which will be issued in Singapore by the crypto platform Paxos.

This stablecoin will be managed by a governance committee representing network partners, including Anchorage Digital, Bullish, and Nuvei. USDG faces stiff competition in a market where Tether and USD Coin currently dominate, making up nearly 90% of the stablecoin market capitalization, as reported by CoinGecko.

This initiative reflects a broader industry expectation that U.S. regulatory attitudes toward digital assets may become more favorable, regardless of the outcome of the upcoming presidential election.

"Global Dollar Network will return virtually all rewards to participants and is open for anyone to join. It is designed to incentivize global stablecoin usage and accelerate societal-wide adoption of this technology," said Paxos CEO Charles Cascarilla.

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