Fintech pioneers unveil Global Dollar Network to boost worldwide stablecoin use The Block

Earlier this month, fintech and digital assets leaders took the latest steps to increase stablecoin use with the launch of the Global Dollar Network (USDG). The Global Dollar Network is a collaboration between players in the fintech world, including Paxos, Anchorage Digital, Bullish, Kraken, Galaxy Digital, Nuvei, and Robinhood.

Many organisations in several industries can now participate, including banks, investment platforms, custodians, merchants, exchanges, card networks, and payment fintechs.

One partner is Anchorage Digital, the only federally chartered cryptocurrency bank in the US. Its CEO, Nathan McCauley, is a firm believer in the power of stablecoins, and stressed how businesses typically “gain an incredible set of opportunities with stablecoins.”

Supporting the launch of the USDG, Tom Farley, CEO of Bullish, a cryptocurrency exchange, agrees. ”Trusted stablecoins are essential in bridging the gap between crypto[currency] and traditional markets. By combining the efficiency of blockchain technology with robust prudential oversight, institutions can confidently engage with digital assets.”

Promising to “revolutionise the stablecoin ecosystem,” the USDG has been issued by Paxos, a regulated blockchain infrastructure out of Singapore.

CEO and Co-Founder of Paxos, Charles Cascarilla, said “Stablecoins are replatforming the financial system and revolutionising how people interact with US dollars and payments.” Unlike other stablecoins that are largely unregulated, retaining all the reserve economics, the USDG will “return virtually all rewards to participants and is open for anyone to join.”

USDG is compliant with the Monetary Authority of Singapore (MAS) and the country’s upcoming stablecoin framework. Currently, many stablecoins fail to meet consumer protection requirements and high standards of large, global businesses. Therefore, most enterprises are hesitant on whether to trust stablecoins in their financial operations.

Add in the fact that enterprise adoption of stablecoins is held back by outdated, costly business models, innovation is limited. As a result, businesses, such as custodians, exchanges and investment platforms, find it difficult to find secure and affordable stablecoin options.

Arjun Sethi, Co-CEO at Kraken, one of the more established cryptocurrency platforms in the world, explained how the stablecoin market has been held back. “The lack of competition in the regulated stablecoin market has prevented the industry from reaching its full potential.” Sethi believes the USDG is a “more equitable model” that will “accelerate new stablecoin use cases.”

USDG hopes to fulfil the shortcomings, introducing more efficient, lower-cost digital transactions to enhance services and improve accessibility.

With the combination of expertise and resources from each partner, Paxos hope the Global Dollar Network will drive creation of both traditional and cryptocurrency-based finance solutions, guided by a network advisory committee, made up of representatives from each partner organisation. CEO Charles Cascarilla says the USDG is “designed to incentivise global stablecoin usage and accelerate societal wide adoption of this technology.”

Reliability and regulatory compliance are key to transforming the stablecoin market and providing solutions that meet the high standards of global enterprises. The Global Dollar Network may be an answer that delivers the necessary qualities.

(Image credit: “Dollar” by mikemol is licensed under CC BY 2.0.)