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  • 05 Nov 24

USDC and USDT Killer: Paxos, Robinhood, and Kraken Introduce New Stablecoin

Major players from traditional finance and the crypto industry have joined forces to launch USDG, a new stablecoin pegged to the US dollar that promises to change the game in the stablecoin sector.

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Major players from traditional finance and the crypto industry have joined forces to launch USDG, a new stablecoin pegged to the US dollar that promises to change the game in the stablecoin sector. The platform aims to promote the global adoption of such assets and offers a fairer model for market participants.

One more player in the sector

As of November 1, the market has a new stablecoin called Global Dollar (USDG), created through the efforts of major financial institutions and crypto companies like Robinhood, Galaxy Digital, Kraken, Nuvei and Paxos. The project is led by Paxos, a company that has already gained regulatory approval. The initiative's partners state that USDG’s goal is to make the stablecoin sector more accessible and competitive, expanding its usage among the broader public.

Regulation and New Standards

The project also emphasizes “substantial compliance” with the upcoming regulations of the Monetary Authority of Singapore, from where USDG will be issued. The main idea is to encourage capital flow and create a more sustainable and regulated ecosystem for users.

Unique Revenue Model

One of the aspects of USDG’s model involves distributing revenue from reserves among project participants, a feature absent in USDC (Circle) and USDT (Tether), where reserve interest income is retained by the issuers. This innovation aims to make stablecoins more attractive for the market. According to BCheque, creator and host of the Modernmarket podcast, the stablecoin business model was previously considered “the best in the world” because the issuers kept all interest income from reserves, but new competition may change this, ultimately benefiting consumers.

“In this fight for users, it’s the consumers who win, as initiatives like PayPal’s PUSD stablecoin already show how users can be incentivized by offering interest on deposits,” he shares.

he launch of USDG demonstrates how competition and transparency can set new standards in the stablecoin market. In the coming years, we can likely expect further changes as market leaders compete for user attention and offer new benefits. Who knows.

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