Paxos International has introduced a new interest-bearing stablecoin named the Lift Dollar (USDL) that is set to be regulated within the Abu Dhabi Global Market (ADGM). The USDL is designed to offer an overnight yield on the interest generated by Paxos International from the reserves supporting it.

The USDL will be fully backed at a 1:1 ratio by liquid U.S. government securities and cash equivalent reserve assets, following the strict guidelines of the ADGM's Financial Services Regulatory Authority. Instead of earning interest on these reserves, Paxos International will impose an issuer fee for the token.

Apart from the ADGM, Paxos has announced plans to make the USDL accessible in Argentina through distributors Ripio, Buenbit, Manteca, and Plus Crypto.

Paxos claims that the USDL marks a pioneering initiative. It will utilize an Ethereum smart contract employing a method called rebasing to automatically distribute yield on the USDL based on prevailing market conditions. As per reports, the anticipated yield is approximately 5%. The company asserted that USDL is the first interest-bearing stablecoin under regulatory oversight.

Stablecoin holders have opportunities to earn interest through various means such as staking, restaking, and yield farming. However, USDL will be restricted from circulation in several regions including the United States, United Arab Emirates outside the ADGM, United Kingdom, European Union, Canada, Hong Kong, Japan, and Singapore due to regulatory requirements.

Paxos International, headquartered in New York, is responsible for issuing other digital assets like PayPal USD, Pax Dollar (USDP), and Pax Gold (PAXG) under the regulation of the New York Department of Financial Services (NYDFS). Previously, Paxos also issued Binance USD (BUSD) until facing regulatory scrutiny for potentially breaching securities laws.

The ADGM, established as a free economic zone in Abu Dhabi in 2013, has been experiencing rapid growth. Notably, it introduced comprehensive distributed ledger technology (DLT) regulations in November and collaborated with Solana to advance DLT technology in February. Several prominent companies including Chainalysis, Blockdaemon, Rain, M2, Laser Digital, Binance FZE, and QCE Capital have acquired licenses to offer digital asset services within the ADGM in the past year.