Blockchain infrastructure company Paxos, in partnership with Singaporean bank DBS, has launched a new stablecoin known as the Global Dollar (USDG). This development comes four months after Paxos received approval to provide digital payment token services as a Major Payments Institution (MPI).
Paxos USDG Corresponds to the Upcoming Singapore Empire
In a press release on November 1, Paxos announced a new stablecoin USDG to be issued by its subsidiary in Singapore under the supervision of the Monetary Authority of Singapore (MAS).
Paxos describes USDG as a dollar-pegged stablecoin created to attract regulated institutions under strict standards of accountability and security. The stablecoin will be released from Ethereum with future expansion to other blockchains.
In particular, USDG is designed to comply with the upcoming Singaporean Stablecoin Regulatory Framework that was announced back in August 2023. In accordance with the regulations set by MAS, USDG is expected to maintain certain standards regarding price stability, capital requirements, redemption, and disclosure.
These regulations include holding only low risk, highly liquid assets in reserve, maintaining a basic capital of 1 million dollars, and timely redemption of no more than five days among other rules to ensure the safety and reliability of all stablecoins managed by MAS.
Commenting on the launch of USDG, Ronak Daya, Head of Product at Paxos emphasized the potential of the new stablecoin to introduce a new perspective to the market in terms of institutional engagement.
Daya says:
Business interest in stablecoins has never been higher than today, but the market lacks a solution that combines regulatory compliance and real economic benefits for businesses.
With the launch of USDG, Paxos adds to its list of well-performing coins such as PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). The blockchain company also served as the issuer of the Binance stablecoin BUSD, prior to the suspension order from the New York Department of the Treasury (NYDFS).
DBS Bank USDG Reserve Management
As mentioned earlier, DBS Bank, Singapore’s largest bank by assets is serving as Paxos’ partner in the USDG stablecoin project. In particular, DBS is expected to act as the custodian of the USDG’s reserves and the main banking partner for cash management.
With this arrangement, DBS Bank continues to expand its capabilities in the digital space amid growing global interest in the emerging industry. In addition to USDG, DBS also operates the DBS Digital Exchange, a crypto trading platform, and is a key partner of the Sandbox metaverse project.
Featured image from Bazaarvoice, chart from Tradingview
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