As a seasoned researcher with over two decades of experience in the ever-evolving world of finance and technology, I find the Global Dollar Network (GDN) project both intriguing and promising. The collaboration between these established industry players signals a maturing and consolidation within the crypto and fintech space.
On November 4, 2024, it was announced that seven leading companies in the field of cryptocurrency and finance have formed a new stablecoin project known as the Global Dollar Network. The initial members of this venture include Anchorage Digital, a digital custodian for cryptocurrencies; Bullish, a crypto exchange; Galaxy Digital, a trading firm; Kraken, another crypto exchange; Nuvei, a company specializing in payments; Paxos, a regulated provider of blockchain infrastructure; and Robinhood, a popular retail trading platform.
As stated in a recent announcement by Paxos, their stablecoin, named Global Dollar (USDG), will be issued from Singapore. This single-currency stablecoin is pegged to the US dollar and Paxos ensures a one-to-one exchange for U.S. dollars. The initiative aims to adhere to the forthcoming stablecoin regulatory guidelines set by Singapore’s Monetary Authority. Notably, DBS Bank—consistently ranked as Asia’s safest bank for 16 years running by Global Finance magazine—will be responsible for managing cash and providing custody services for USDG’s reserves.
Since 2018, Paxos has produced more than $160 billion worth of stablecoins, under the supervision of various international regulatory bodies. The company plans to release monthly reports detailing the reserve assets for USDG, similar to their practice with other stablecoins, to ensure transparency regarding the backing resources.
The team argues that current stablecoins face two major issues: they fail to adhere to enterprise-level standards and consumer safeguards, and they burden blockchain systems with expensive practices due to outdated business strategies. Their proposed remedy is to share financial rewards equally among network participants instead of concentrating them with a single entity – a model that is prevalent in the current stablecoin market.
USDG trading has commenced on four platforms: Anchorage Digital, Galaxy Digital, Kraken, and Paxos. The original founders aim to incorporate USDG support on additional platforms, although specific launch dates are yet to be revealed. The network is inviting applications from prospective partners in various fields such as custodians, digital exchanges, payment service providers, merchants, blockchain technologies, card networks, banks, and investment platforms.
The project’s leadership made several statements about its potential impact.
Nathan McCauley, CEO of Anchorage Digital, proposed that stablecoins might facilitate quicker person-to-person transactions, enhance cross-border payments, boost trading functions, and offer chances to garner rewards on certain stablecoin holdings. Arjun Sethi, Co-CEO of Kraken, described the regulated market for stablecoins as underdeveloped in terms of competition and suggested that USDG’s economic structure could lure mainstream users.
Charles Cascarilla, CEO of Paxos, stated that stablecoins are revolutionizing financial systems, altering the way individuals engage with US dollars and payment methods. Johann Kerbrat, General Manager of Robinhood Crypto, referred to stablecoins as a link connecting conventional finance with cryptocurrencies, emphasizing potential advantages such as quicker and more cost-effective transactions.
Enthusiastic CEO Tom Farley discussed integrating blockchain technology with regulatory guidance as a means to bolster faith among institutions in digital assets.
Reliable stablecoins play a crucial role in connecting the crypto world with traditional finance. By merging the speed and reliability of blockchain technology with solid financial regulation, institutions can comfortably invest in digital assets. We’re excited to be part of the Global Dollar Network launch and happy to offer more trusted stablecoins to Bullish users, starting with USDG.
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2024-11-05 11:10