A coalition of major financial and cryptocurrency companies has launched the Global Dollar Network, aiming to accelerate the use of stablecoins globally.
Participants and Goals of the Global Dollar Network
Key participants in the initiative include Robinhood, Galaxy Digital, Kraken, and Paxos. Partners such as Anchorage, Bullish, Nuvei, and others have joined the consortium, which may include custodians, exchanges, fintech companies, merchants, protocols, card networks, banks, and investment platforms. An advisory committee composed of representatives from partner organizations will guide the development of the network.
USDG: The Heart of the Network
At the core of the network is the Global Dollar (USDG), a stablecoin pegged to the US dollar. The USDG is backed 1:1 by US dollar deposits, short-duration US government securities, and other cash equivalents. DBS Bank will manage the US dollar reserves for USDG, offering an added layer of trust and security. "The lack of competition in the regulated stablecoin market has prevented the industry from reaching its full potential,” said Arjun Sethi, Co-CEO of Kraken. “USDG upends this dynamic by bringing mainstream participants into the ecosystem.”
Addressing Stablecoin Market Challenges
The launch of the Global Dollar Network comes amidst challenges faced by existing stablecoins. Issues such as outdated business models and high transaction costs limit enterprise adoption and hinder innovation in the blockchain ecosystem. The network aims to tackle these issues by offering a stablecoin that provides economic benefits to all partners. "...the leading stablecoins are unregulated and retain all the reserve economics. Global Dollar Network will return virtually all rewards to participants," said Charles Cascarilla, CEO and Co-Founder of Paxos.
The Global Dollar Network, featuring USDG, aims to reshape the stablecoin landscape by providing a transparent and beneficial system for all participants.
