Paxos Expands Its Tokenization Offerings by Introducing a New US Dollar-Pegged Stablecoin (USDG)

Blockchain and tokenization infrastructure company Paxos is expanding its offerings by introducing a dollar-pegged stablecoin.

Key Takeaways:

Paxos, a blockchain and tokenization infrastructure company, is now offering a dollar-pegged stablecoin.

Paxos announced the launch of Global Dollar (USDG), a new stablecoin pegged 1:1 to the dollar by reserves maintained through US dollar deposits, government securities, and other cash-equivalent assets.

According to an official announcement, Paxos Digital Singapore Pte. Ltd. will issue USDG, while Paxos Global Pte. Ltd. will distribute it through wholesale and retail channels.

With the addition of USDG, Paxos is now expanding its presence in the crypto stablecoin market, which already includes Pax Gold (PAXG), Pax Dollar (USDP), and PayPal USD (PYUSD).

Moreover, Paxos contributes to the stablecoin market, which is valued at $176.7 billion and serves various functions across different services. This includes entertainment activities, for example, crypto casinos where gamblers can play Sic Bo online.

Sic Bo, an old Chinese game that has become popular worldwide in several major online gaming platforms, is played with three dice on a special table. Players can bet on various outcomes like the dice sum or possible combinations.

Deposits and withdrawals are made easy with stablecoins in online gaming, as they are processed instantly, ensuring a smooth gambling experience.

Highlighting the problem that USDG solves, Ronak Daya, Head of Product at Paxos, said the following:

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

According to the announcement, DBS Bank, the largest bank in Southeast Asia by assets, will handle cash management and custody of USDG reserves.

Daya adds that USDG will contribute to the global adoption of stablecoins through its partnership with DBS and will especially benefit enterprise clients on a global scale.

USDG is the first digital asset issued by Paxos Digital Singapore, while USDP, PYUSD, and PAXG stablecoins are issued by Paxos Trust Company, LLC, which is supervised by the New York Department of Financial Services (NYDFS).

Additionally, Lift Dollar (USDL), a yield-bearing stablecoin, is issued by the UAE-domiciled affiliate, Paxos International.

Paxos specified that USDG is designed to be compliant with an upcoming stablecoin framework from the Monetary Authority of Singapore (MAS).

In August last year, MAS announced features of a new regulatory framework that covers stablecoins in Singapore. According to an official MAS media release, any stablecoin issued in Singapore and pegged to a G10 currency must fulfill several key standards.

These include requirements that promote stability of the asset’s value, minimum base capital to reduce insolvency risks, appropriate disclosures, and redemption at par after a maximum of five business days following a redemption request.

According to Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision) at MAS, the framework is necessary to advance the use of stablecoins as a trusted bridge between the fiat and crypto ecosystems, and as a credible medium of exchange.

Earlier this year, in July, Paxos announced that the United States Securities and Exchange Commission (SEC) had closed its investigation into Binance USD (BUSD), a Binance-branded stablecoin the company also issued.

According to Paxos, the SEC sent an official letter stating that there is no recommendation for enforcement action on the BUSD case.

The case began in February 2023 when the Commission sent Paxos a Wells notice alleging that BUSD was an investment contract.

While Paxos maintains its USD-pegged stablecoins do not qualify as securities under federal law, it believes that the Wells Notice was unnecessary.