Visa Joins USDG Stablecoin Consortium From Paxos, Expanding the Network

Visa is joining the Global Dollar Network (USDG), a stablecoin consortium convened by U.S. regulated digital asset firm Paxos, alongside cryptocurrency and fintech

Payments giant Visa (NYSE: V) is joining the Global Dollar Network (USDG), a stablecoin consortium being built by U.S. regulated digital asset firm Paxos.

The addition of the traditional finance giant comes as the potential of the stablecoin market, and its role in the future of finance, is coming into sharper focus.

It is also heating up the competition in the sector, with the first and second largest issuers of USD-pegged tokens being Tether’s USDT and its smaller sibling Circle with USDC.

Those topl stiffeners are also being used by a burgeoning band of cryptocurrency and fintech firms, including Robinhood (NASDAQ:HOOD) and Kraken, which are putting together their own stablecoin programs.

In the case of USDG, the initial cohort of members also includes Anchorage Digital, Bullish (the owner of CoinDesk) and Nuvei (TSX: NUV)

The USDG network is designed to share the yield with participant firms that can create connectivity and liquidity, according to two people familiar with the plans.

This stands in contrast to how other major stablecoins operate. For example, Tether pays no interest to users of its USDT token, and instead keeps the full yield from the network’s Treasury bills.

In the case of USDG, the network is designed to share the yield with participant firms that can create connectivity and liquidity, according to two people familiar with the plans.

Those details of the network were shared previously by Paxos executives, who have also stated that the USDG program is open to any firm that meets the required regulatory standards.

Paxos is also planning to launch an institutional-grade tokenized equity offering later this year, part of a broader move by Wall Street to adopt new digital asset formats.

Those plans were shared by Paxos CEO Charles Benisty earlier this year at the World Economic Forum in Davos, Switzerland.

The move by Visa to join the USDG network marks a significant step for the traditional finance industry into the decentralized finance space.

It is also a testament to the growing interest in stablecoins as a means of payment and investment.

Visa has been increasing its presence in the cryptocurrency space in recent months.

Earlier this year, it was reported that Visa was helping Sam Altman’s World Network, a venture-funded initiative to build the infrastructure for the next generation of the internet, to launch a new cryptocurrency.

Mastercard (NYSE: MA) is also partnering with cryptocurrency firms, including investing in the non-custodial wallet MetaMask.

A representative of Paxos said the firm can not comment on prospective partners. Visa did not respond to requests for comment.