A consortium of big firms in the crypto-space have joined forces to introduce a new stablecoin onto the global market, pegged to the US dollar and with a focus on meeting regulatory standards and consumer protections.

The newly formed Global Dollar Network, formed initially by partnership between Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos and Robinhood, has been described as an open network to accelerate and reward global stablecoin adoption, and expand real world use cases.

Issued out of Singapore by Paxos, the network claims that their Global Dollar (USDG) is already compliant with the Monetary Authority of Singapore’s upcoming stablecoin framework, and the consortium have lined up DBS Bank, one of Southeast Asia’s largest banks, to serve as the primary banking partner at launch for cash management and custody of USDG reserves. 

Paxos said that starting today, additional partners across various sectors, including custodians, exchanges, payment fintechs, merchants, protocols, card networks, banks and investment platforms can join the network to take advantage of innovation in the global movement toward digital currency.

The consortium claims that the Global Dollar offers a new way of doing business for those in the crypto-sphere, where innovation and widespread adoption of cryptocurrencies has been restricted by disparate blockchain ecosystems.

To encourage broader platform participation, firm’s within the network will be rewarded for activities that promote the new stablecoin’s adoption, with income shared based on an as yet undefined assessment of the liquidity and connectivity they contribute.

Paxos said that the effort will be directed by a network advisory committee, including partner representation, with the aim being to challenge the dominant players in the stablecoin market, including market leader Tether, which currently has a market cap of over $120 billion (£92.4 billion).

Unlike Tether or Circle, which distributes the world’s second-largest stablecoin, the Global Dollar Network said that it won’t retain all of the interest made from reserves, and joins a small host of other promising yield-sharing stablecoin initiatives like the decentralised M^0 project.  

Charles Cascarilla, CEO and co-founder of Paxos, said: “Stablecoins are replatforming the financial system and revolutionising how people interact with US dollars and payments. However, the leading stablecoins are unregulated and retain all the reserve economics.

“Global Dollar Network will return virtually all rewards to participants and is open for anyone to join. It is designed to incentivize global stablecoin usage and accelerate societal wide adoption of this technology.”

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At the moment, users of Anchorage Digital, Galaxy Digital, Kraken and Paxos are able to get USDG on those platforms today, with plans to make the new stablecoin available across all named distribution partners in the near future.

With stablecoin transactions estimated to reach over £147 billion by 2028, competition in the sector is growing, as is government regulation. Regional blocs, such as the EU, are scrambling to keep up with changes in the crypto market, and develop enforceable frameworks for regulation.

There is some evidence that this is beginning to have an impact, with Coinbase recently announcing that it would delist some stablecoins in Europe by the end of the year, as it braces for tougher incoming regulation in the region.