A coalition of leading traditional finance and cryptocurrency firms has launched the Global Dollar Network, designed to accelerate the use of stablecoins globally.
Global Dollar Network Launch
Key players in this initiative include Robinhood, Galaxy Digital, Kraken, and Paxos, aiming to enhance the adoption and utility of stablecoins worldwide. Participants in the consortium may include custodians, exchanges, fintechs, protocols, banks, and others. The advisory committee, comprising representatives from partner organizations, will guide the direction of the network.
Role of Global Dollar and Stability Assurance
At the core of the network is the Global Dollar (USDG), a stablecoin pegged to the United States dollar. The USDG is backed 1:1 by US dollar deposits and short-duration US government securities. DBS Bank, Singapore's largest bank, manages the US dollar reserves, adding trust. Arjun Sethi from Kraken noted: 'The lack of competition in the regulated stablecoin market has prevented the industry from reaching its full potential.'
Addressing Challenges in the Stablecoin Market
Many existing stablecoins face challenges such as outdated business models and high transaction costs. The Global Dollar Network aims to address these by offering a stablecoin with tangible economic benefits for partners. Charles Cascarilla of Paxos stated: 'Global Dollar Network returns virtually all rewards to participants and is open for anyone.'
The Global Dollar Network, supported by major companies, aims to develop the stablecoin market by offering new models and encouraging widespread use of technology.
