The cryptocurrency market has a new stablecoin (USDG) pegged to the US dollar. The new stablecoin released a day before the US presidential election was launched by a consortium of fintech companies like Kraken, Robinhood and Galaxy Digital.
This newly launched Global Dollars Network seeks to fast-forward how stablecoins are used across the world. The aim is to build a digital asset which provides economic benefits to all the parties who are behind it.
Stablecoins are usually backed by currencies like the Euro or the US dollar. As the US election fostered a surge in crypto adoption with prices of Bitcoin nearing its all-time high (ATH) in anticipation of federal rate cuts, more companies are getting into stablecoins.
These digital tokens act as a bridge between traditional currencies and crypto as they facilitate the conversion of crypto to traditional currencies. Since Stablecoins are shielded from the volatile price fluctuations of the crypto world, they are often used by companies adopting digital assets.
The newly launched Global Dollars Network will use USDG issued by Paxos, a crypto platform based in Singapore. A committee having people from the network’s partners like Nuvei, Anchorage Digital etc will govern the usage of this token.
Paxos CEO Charles Cascarilla said that the network aims to “return all rewards to participants and is open for anyone to join” as it is designed to “incentivise global stablecoin usage”.
Currently, the stablecoin market is dominated by USDC and Tether, making up 90% of the market capitalization. USDG has to wade through this to establish itself as a key player in the crypto ecosystem. The launch of USDG comes at a time when the crypto market is rife with speculations that authorities will warm up to digital assets, irrespective of whether Harris or Trump wins the elections.
As of November 5 morning, USDC and Tether are trading at $1.00 (up 0.01%) and $0.995 (up 0.04%) respectively with a trading volume of $6.92 billion and $65.95 billion respectively. The market capitalization of USDC stands at $35.13 billion while Tether is at $120.43 billion.