30s Summary

Financial firms Robinhood, Galaxy Digital, Kraken, and Paxos back a new digital currency connected to the US dollar. The companies plan to encourage global use of digital currencies, citing a lack of competition in the “stablecoins” industry. Kraken’s co-CEO Arjun Sethi suggests such competition could catalyse sector growth. Paxos’ new digital dollar, USDG, launched in November on the Ethereum blockchain and is set to expand to other blockchains. Available by invitation to custody banks, crypto exchanges, and fintech firms, the USDG is backed 1:1 with traditional US dollars via short-term US government securities.

Full Article

A bunch of mainstream finance and crypto companies including Robinhood, Galaxy Digital, Kraken, and Paxos are teaming up. They’re all backing a new type of digital currency that’s linked to the US dollar. This group of companies want to speed up the use of these digital currencies all over the globe.

Kraken’s co-CEO Arjun Sethi said there’s been a lack of competition when it comes to regulated digital currencies, or “stablecoins”. He believes this has held back the industry from really taking off. He hopes the new digital dollar (USDG) will change things up with a fairer model that attracts loads more people.

This new network will encourage people to use Paxos’ USDG digital dollar, which the company launched at the start of November. At the moment, you can only get it on the Ethereum blockchain, but Paxos plans to bring it to other blockchains too.

Paxos will be creating the USDG digital dollar in Singapore. The company says Singapore’s financial regulator is well-prepared to oversee these types of digital currencies. The likes of custody banks, crypto exchanges, and fintech firms can join the global digital dollar network by invitation.

Singapore’s biggest bank, DBS Bank, will be looking after the traditional US dollars that will back the USDG digital dollar. The USDG dollar will be matched 1:1 with the traditional dollar, using things like short-term US government securities and other cash equivalents. This makes sure people can exchange their digital dollars for cash.

Paxos also operates products like PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG).

The USDG digital dollar and its network will be competing with two major issuers of digital currencies as they make their way into a market dominated by Tether (USDT) and Circle’s USD Coin (USDC). These two digital coins hold more than half of the supply of similar coins on Ethereum, according to DefiLlama data.