Paxos Launches USDG Stablecoin in EU, Competes with USDC

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

The USDG is issued by Paxos Issuance Europe OY, a Finnish entity regulated by the Financial Supervisory Authority of Finland. The stablecoin's 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 surrounding cryptocurrencies 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 was 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.

Walter Hessert, Paxos' Chief Strategy Officer, commented, "This initiative comes at a time when the demand for stablecoins is rapidly increasing." Recently, during the first Ethereum Community Conference held in Europe, Robinhood, a major U.S. brokerage firm, announced an ambitious suite of crypto products. The new offerings include tokenized stocks, exchange-traded funds, crypto perpetual futures, and crypto staking services. These moves not only bolster Robinhood's competitive edge in the crypto market but also signal the emergence of a "tokenized Wall Street."

The launch of USDG marks a significant step in the competition for market share among regulated stablecoins. With the support of major financial institutions and compliance with stringent regulatory frameworks, USDG is poised to become a key player in the stablecoin landscape. The collaboration between Paxos, Robinhood, Mastercard, and other partners underscores the growing importance of stablecoins in the global financial ecosystem.