Arbitrum joins Paxos-led Global Dollar Network as USDG goes live on the layer-2
USDG arrives on Arbitrum
Arbitrum has joined the Global Dollar Network, the stablecoin group led by payments firm Paxos. The network's token, USDG, is a stablecoin, meaning a crypto token designed to hold a steady value, usually one U.S. dollar.
USDG launched on Arbitrum on Tuesday. Arbitrum is an Ethereum layer-2 network, which is a network built on top of Ethereum. The token is issued by Paxos and is backed one-for-one by dollar reserves.
With the move, Arbitrum aims to earn a share of the economics generated by stablecoins on its network, CoinDesk reported.
Where USDG will be used on the network
- Integrations span trading, lending and payments, and include Fluid, Morpho, GMX, Maple, Li.Fi, Gauntlet, Steakhouse, LayerZero and Kraken.
- Kraken is providing on- and off-ramps, which are ways to move money into and out of crypto.
- Uniswap and Fhenix are set to follow.
How the network shares reserve rewards
The Global Dollar Network has more than 150 partners, including Robinhood, Kraken, Mastercard and OKX, according to the report. Its model spreads the rewards generated by USDG's reserves among partners that help drive adoption, instead of leaving all of those economics with the issuer.
"With USDG, Arbitrum and builders across the platform now have a stake in the growth upside," said Brendan Ma, head of investment strategy at the Arbitrum Foundation.
A proposal asks ArbitrumDAO for 100 million ARB
A governance proposal published Tuesday asks ArbitrumDAO to make USDG growth a strategic priority. It also asks to add 100 million ARB to the DRIP incentive program and to use treasury assets to support USDG liquidity.
Stablecoins already on Arbitrum
About $3.8 billion of stablecoins are on Arbitrum, DefiLlama data shows. Circle's USDC accounts for roughly 60% of that amount. Arbitrum does not receive a direct share of the reserve income those tokens generate.
Other groups competing for digital dollars
Open Standard is building around OpenUSD, with backing from payments and commerce firms including Mastercard, Visa, Stripe, Coinbase and Shopify. In Europe, Qivalis is backed by 37 banks. The idea behind these alliances is to spread issuance, distribution and economics across a wider group of partners rather than leaving control with a single company.
Arbitrum has also drawn recent attention for other reasons. Its technology underpins Robinhood Chain, the brokerage's planned Ethereum-based network, and Robinhood has agreed to share a portion of the revenue from user activity with the Arbitrum ecosystem.
What is confirmed
- USDG launched on Arbitrum on Tuesday with the integrations listed above.
- USDG is issued by Paxos, backed one-for-one by dollar reserves, and has more than $3 billion in circulation across networks.
- The Global Dollar Network has more than 150 partners.
- A governance proposal concerning USDG growth was published Tuesday.
What is still unclear
The source does not say whether ArbitrumDAO has voted on the proposal, or when a vote might happen. It also gives no date for when Uniswap and Fhenix will add USDG.
Why this matters
Stablecoin alliances are becoming a larger part of the competition over digital dollars, according to the report. Arbitrum currently does not directly share in the reserve income from the stablecoins held on its network. Backing USDG gives the network a route to share in the rewards its reserves generate.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.