Paxos Launches USDG Stablecoin in EU, Backed by Robinhood, Mastercard

Paxos, a leading issuer of stablecoins, has introduced the Global Dollar (USDG-USD), a dollar-pegged stablecoin, for users across the European Union. This launch is backed by major institutions including Robinhood, Mastercard, and Kraken, and is set to be available in 30 countries, providing access to over 450 million consumers. The USDG has been certified under the EU's Markets in Crypto-Assets (MiCA) regulation and is overseen by the Finnish Financial Supervisory Authority (FIN-FSA) and the Monetary Authority of Singapore (MAS).

The USDG is issued by Paxos Issuance Europe OY, a Finnish entity regulated by the FIN-FSA, and its structure aligns with the EU's new framework for crypto assets. Paxos has committed to storing a portion of USDG's cash reserves in European banks and has pledged to offer one-to-one redemption, adhering to MiCA's stringent support and audit requirements. Despite the stringent regulations in the EU, the demand for dollar-pegged stablecoins has surged. Paxos anticipates that USDG will compete with other regulated stablecoins, such as Circle's USDC, which is the first stablecoin to receive MiCA certification and is currently the largest MiCA-compliant token.

The USDG is scheduled to launch in November 2024 and will support the Global Dollar Network (GDN), an alliance of industry leaders dedicated to promoting the adoption of stablecoins. Founding partners of the GDN include Robinhood, Kraken, Paxos, Anchorage, Nuvei, Bullish, and Galaxy. The strategic move by Paxos comes at a time when the demand for stablecoins is rapidly increasing. Recently, during the first Ethereum Community Conference in Europe, Robinhood, a major U.S. brokerage firm, announced an ambitious suite of crypto products, including tokenized stocks, exchange-traded funds, crypto perpetual futures, and crypto staking services. These initiatives not only bolster Robinhood's competitive edge in the crypto market but also signify the emergence of a "tokenized Wall Street."

This move by Paxos is a significant step in the competitive landscape of stablecoins, particularly in the regulated environment of the EU. The USDG's compliance with MiCA regulations and its backing by major financial institutions position it as a strong contender in the market. The launch of USDG, along with the support from the GDN, indicates a growing trend towards the adoption of stablecoins in the financial ecosystem. The collaboration with Robinhood, Mastercard, and Kraken further strengthens Paxos's position in the market, as these partnerships bring a wide range of financial services and consumer bases to the table. The introduction of USDG is expected to drive innovation and competition in the stablecoin sector, ultimately benefiting consumers with more options and greater regulatory assurance.