Paxos Introduces USDG Stablecoin Under Singapore Regulatory Framework

TLDR

• Paxos launches new USDG stablecoin compliant with Singapore’s upcoming regulations
• USDG is pegged 1:1 to USD, backed by high-quality liquid assets
• DBS Bank, Southeast Asia’s largest bank, manages the reserves
• Initially available on Ethereum with plans for multi-chain expansion
• Follows Paxos’ recent full approval from Singapore’s MAS for crypto services

Paxos, the regulated blockchain infrastructure company, has introduced a new stablecoin called Global Dollar (USDG), designed specifically to align with the upcoming regulatory framework of Singapore’s Monetary Authority (MAS). The launch, announced on October 31, 2024, marks a strategic move in the regulated stablecoin sector.

The USDG stablecoin maintains a one-to-one peg with the U.S. dollar, providing users with a stable digital asset for transactions and trading. Paxos Digital Singapore, the company’s regional arm, oversees the issuance of the new token.

To ensure stability and security, USDG’s reserves consist of high-quality liquid assets, including U.S. dollar deposits and short-duration U.S. Government securities.

DBS Bank, which holds the position of Southeast Asia’s largest bank by assets, has been appointed to manage these reserves.

The stablecoin’s initial deployment takes place on the Ethereum blockchain, but Paxos has confirmed plans to expand to additional blockchain networks.

This multi-chain approach aims to increase accessibility and foster wider adoption of regulated stablecoins globally.

Ronak Daya, who leads product development at Paxos, points to rising enterprise demand for stablecoins. He notes that while interest is high, the market lacks compliant options that offer meaningful incentives for users. The USDG stablecoin aims to fill this gap.

The timing of the USDG launch follows Paxos Digital Singapore’s recent achievement of full regulatory approval from the Monetary Authority of Singapore.

This authorization enables the company to provide crypto services in Singapore, adding to its existing licenses in the United States and United Arab Emirates.

The company’s expansion into Singapore’s market represents a calculated step in its global growth strategy. Singapore joins the U.S. and UAE as the third jurisdiction where Paxos maintains regulatory clearance for crypto-related services.

DBS Bank’s involvement adds a layer of institutional credibility to the project. As Southeast Asia’s leading bank, DBS brings extensive experience in managing traditional financial assets to the digital currency space.

The reserves backing USDG consist entirely of cash equivalents and government securities, providing a solid foundation for the stablecoin’s stability. This conservative approach to asset backing aligns with regulatory expectations and institutional requirements.

Paxos has established itself as a pioneer in regulated blockchain infrastructure since its founding in 2012 by Charles Cascarilla and Rich Teo. The company’s focus on compliance and regulation has attracted substantial investor interest.

The financial backing behind Paxos includes approximately $540 million raised through various funding rounds. Notable investors include Oak HC/FT, Declaration Partners, and Mithril Capital, demonstrating strong institutional confidence in the company’s approach.

USDG enters the market as enterprise interest in stablecoins continues to grow. The new token provides businesses with a regulated option for digital dollar transactions across borders.

The stablecoin’s compliance with Singapore’s forthcoming regulatory framework positions it advantageously in the Asian market. This adherence to regulatory standards may serve as a model for future stablecoin developments in other jurisdictions.

Paxos continues to develop its blockchain infrastructure services while maintaining close relationships with regulators across multiple jurisdictions. The company’s experience in navigating regulatory requirements has helped shape the development of USDG.

The launch represents Paxos’ latest step in expanding its regulated stablecoin offerings, with the USDG designed to meet the needs of both institutional and retail users in the growing digital asset market.