As an analyst with over two decades of experience in the financial industry, I find the latest development by Paxos highly intriguing and promising. The launch of their Singapore-compliant stablecoin, USDG, is a testament to the growing acceptance and recognition of digital assets in traditional finance.
The regulated blockchain firm, Paxos, launched a compliant digital currency called Global Dollar (USDG). This stablecoin holds its U.S. dollar reserves, which are controlled, under Singapore’s regulations, by the DBS Bank.
5 months ago, Paxos introduced a new interest-bearing stablecoin called USDL regulated by the UAE. On October 31st, they announced the release of another localized stablecoin, USDG, this time in Singapore.
Supporting stablecoin innovation through regulatory clarity
her explanation outlines their thought process behind such partnership.
“Stablecoin issuers will find that our solutions will help them meet the robust standards regulators and customers expect from them. This partnership further expands DBS’ wide-ranging involvement across the digital asset ecosystem.”
Based on Paxos’ statements, USDG conforms to the forthcoming stablecoin guidelines set by MAS, which were established in August 2023. Consequently, USDG is already accessible on the Ethereum blockchain, and it will become available on other platforms as regulations adapt over time.
Plans for global distribution of USDG
Paxos said in a statement on X:
“USDG is built to power the next wave of global stablecoin adoption, catering to both crypto-native ecosystems and regulated institutions that maintain higher standards of operation.”
The business intends to collaborate with international cryptocurrency trading platforms, digital wallet services, and exchange markets, with the aim of making USDG accessible to both individual users and institutional investors.
At the same time, Sygnum Bank, a Swiss cryptocurrency bank, pointed out that clearer regulations are prompting conventional financial organizations to introduce stablecoins as well. They further explained this by stating:
“Stablecoin providers who are already adhering to the developing regulatory standards are likely to gain the advantage as stablecoin use in real-world transactions grows.”
1-to-1 backing of USDG involves holding an equal amount of U.S. dollars as dollar deposits, brief-term U.S. Treasury bonds, and other liquid assets. This guarantees that token holders can exchange their USDG for actual U.S. currency.
According to Ronak Daya, the collaboration with DBS is expected to facilitate widespread adoption of stablecoins at an enterprise level.
Besides PayPal USD (PYUSD), Paxos’s other digital currency options also encompass Pax Dollar (USDP) and Pax Gold (PAXG).
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2024-11-01 11:24