Paxos Launches USDG Stablecoin in Compliance with Singapore Regulations

Highlights:

• Paxos launched USDG, a US dollar-backed stablecoin, under Singapore’s regulatory framework.
• The stablecoin is developed with DBS Bank, which manages USDG reserves and cash.
• USDG aims to enhance global stablecoin adoption for both crypto and regulated institutions.

Digital assets company Paxos has launched Global Dollar (USDG), a US dollar-backed stablecoin, under Singapore’s regulatory framework. The stablecoin is developed in collaboration with Singapore’s DBS Bank, Southeast Asia’s largest bank by assets. The bank will handle cash management and custody of USDG reserves.

(1/4) Today marks an exciting milestone in Paxos’ history. We’re pleased to introduce @global_dollar, the latest US dollar-backed stablecoin issued by Paxos. This is the 6th trusted digital asset from Paxos and its affiliates.

View the official press release here:… pic.twitter.com/G7fb9Ny9bT

— Paxos (@Paxos) October 31, 2024

Paxos plans to collaborate with global exchanges, wallets, and platforms to distribute the stablecoin to institutions and individuals. Initially, USDG will launch on the Ethereum blockchain, with plans to expand to other blockchains soon. USDG is Paxos’ second stablecoin, following the launch of the interest-bearing Lift Dollar (USDL) regulated by the UAE five months earlier.

The firm said in a statement: 

“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.”

Paxos Digital Singapore Receives Approval for USDG from MAS

Paxos Digital Singapore, the Singapore branch of Paxos, received approval for USDG from the Monetary Authority of Singapore (MAS) in July. Evy Theunis, head of digital assets at DBS Bank, shared the rationale behind partnering with the crypto company at that time. The approval is a major milestone for Paxos in growing its regulatory-compliant stablecoin offerings in the region.

Theunis stated:

“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.”

Paxos clarified that it will back the new stablecoin with “only high-quality liquid assets.” These assets include U.S. dollar deposits, short-term U.S. government securities, and other cash equivalents. The issuer must keep a 1:1 parity with the U.S. dollar. This allows holders to redeem their tokens for fiat currency anytime.

Rich Teo and Charles Cascarilla founded Paxos in 2012. The company specializes in regulated blockchain infrastructure. It has raised nearly $540 million in funding. Investors include Oak HC/FT, Declaration Partners, and Mithril Capital, among others.

Enterprise Demand for Stablecoins Grows Amid Regulatory Changes

Ronak Daya, head of product at Paxos, noted that enterprise demand for stablecoins is very high. However, compliant options with real incentives are limited. He emphasized that USDG aims to increase global enterprise adoption. Strong regulatory standards and Paxos’ partnership with DBS Bank provide support for this.

Tether and Circle currently dominate the stablecoin industry. However, regulatory changes have attracted established financial services players to this market. Revolut and Robinhood, two major firms in traditional finance, are considering issuing their own stablecoins. Both companies are looking to address the gap in Europe resulting from the Markets in Crypto-Assets Regulation (MiCA), though this remains unconfirmed. Ripple, recognized for its blockchain-based cross-border payment infrastructure, has launched a new stablecoin. Additionally, the UAE has recently approved a dirham-pegged stablecoin.