Global Dollar Stablecoin Targets Numerous Partnerships Drawn by High Yields, Welcomes ‘Major Players’ from Traditional Finance.
It’s early days for the global dollar (USDG), a stablecoin that debuted in November, but many firms could join the effort to popularize the token in exchange for a share of the yield earned on reserve assets, according to crypto exchange Kraken, one of the founding partners. USDG, supported by trading platform Robinhood, stablecoin issuer Paxos, crypto investor Galaxy Digital, and crypto bank Anchorage Digital, recently welcomed 19 new member firms, many of them native to the crypto space. Traditional banks and large financial institutions are also showing interest, said Kraken’s consumer business lead Mark Greenberg.
“There are 25-plus partners now, and I hope in another month, we’ll be announcing the next 25, and then the next 25. So from 25 to 50 to 1,000,” Greenberg said in an interview. “I’m very excited about some of the partners coming up in traditional finance and in crypto — big names on both sides. We’re talking to a lot of banks and I think a few will be coming online soon.”
The evolving dollar stablecoin landscape has thus far been dominated by two major players: Tether’s USDT, with a market cap exceeding $150 billion, and Circle’s USDC, which has a circulation of just over $60 billion. USDG currently stands at $276 million, making it the 24th-largest stablecoin according to CoinGecko rankings. Paxos, the New York-regulated firm behind USDG, initially aimed to compete with USDC and USDT through a partnership with exchange giant Binance; however, that collaboration was discontinued for regulatory reasons.
Greenberg emphasized that USDG is a “true consortium,” and while Paxos serves as a distribution partner, it has specific administrative responsibilities. “We are building a decentralized community around the stablecoin, with yield that benefits everyone,” Greenberg stated. “Some of us are founding partners, and if we were a property company, Paxos would handle property management. They ensure that licenses are maintained, treasuries are managed appropriately, and minting occurs correctly. However, it’s up to all of us to work as equal partners to make the global dollar network successful.”
The consortium’s growth is driven by the promise of yield, which encourages firms to join and reimagines stablecoins as integral parts of the broader financial system, Greenberg mentioned. This strategy is how USDG plans to challenge the established dominance of Tether and Circle.
“I believe in decentralization over centralization. I believe in returning value to users, and USDG embodies that in a way that doesn’t currently apply to Circle or Tether,” said Greenberg. “Tether and Circle generate significant profits, whereas traditional banking offers minimal returns on deposits. Stablecoins should operate differently.”
Kraken processes substantial amounts of money globally and has adopted USDG for its own business needs. “We utilize global dollars and the USDG worldwide,” Greenberg noted. “A wire transfer can take four to five days and stuck at a random bank along the way. That landscape is changing rapidly, especially with players like Visa and MasterCard recognizing the growing role of stablecoins.”
Kraken’s clients are also capitalizing on the opportunity to earn up to 4.1% on U.S. dollars worldwide by investing in USDG, Greenberg added. “In the U.S., this may not seem particularly compelling, as there are other options available. However, for individuals in countries like Argentina or Canada, where U.S. dollar accounts are scarce, earning 4.1% on deposits represents an exceptional opportunity.”
