Blockchain infrastructure company Paxos, in conjunction with Singaporean bank DBS, has introduced a new stablecoin known as Global Dollar (USDG). This development comes four months after Paxos secured approval to offer digital payment token services as a Major Payments Institution (MPI).
Paxos USDG Compliant With Upcoming Singaporean Regime
In a press release on November 1, Paxos announced the new stablecoin USDG set to be issued by its subsidiary in Singapore under the supervision of the Monetary Authority of Singapore (MAS).
Paxos describes USDG as a dollar-pegged stablecoin created to appeal to regulated institutions under strict standards of accountability and security. The stablecoin will be issued on Ethereum with impending expansions to other blockchains.
In particular, USDG is designed to comply with the upcoming Singaporean Stablecoin Regulatory Framework announced back in August 2023. In line with the regulations set by MAS, USDG is expected to maintain certain standards regarding value stability, capital requirements, redemption, and disclosure.
These regulations include holding only low-risk, highly liquid assets in reserve, maintaining a base capital of $1 million, and timely redemption of no more than five days among other rules to ensure the security and credibility of all MAS-regulated stablecoins.
Commenting on USDG’s launch, Ronak Daya, Head of Product at Paxos has stressed the potential of the new stablecoin to introduce a new perspective to the market in terms of institutional engagement.
Daya says:
Enterprise interest in stablecoins has never been higher than it is today, but the market lacks a solution that combines regulatory compliance with real economic incentives for enterprises.
With the launch of USDG, Paxos adds to its list of operational stablecoins such as PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). The blockchain company also served as the issuer of Binance stablecoin BUSD, prior to a cease order from the New York Department of Financial Services (NYDFS).
DBS Bank To Manage USDG Reserve
As earlier stated, DBS Bank, the largest bank in Singapore by assets is serving as Paxos’s partner on the USDG stablecoin project. In particular, DBS is expected to operate as the custodian of USDG reserves and the major banking partner for cash management.
With this arrangement, the DBS bank continues to widen its influence in the digital space amidst growing global interest in the nascent industry. In addition to USDG, DBS also operates the DBS Digital Exchange, a crypto-trading platform, and is a significant partner of the Sandbox metaverse project.