Paxos is the issuer of the PayPal PYUSD and its own stablecoins, including the new Singapore regulated ‘global dollar’. Today it launched the Global Dollar Network (GDN) which incentivizes partners and distributors by sharing most of the stablecoin’s revenues with them. Founding partners include Robinhood, Nuvei, Kraken, Anchorage Digital, Galaxy, Bullish, and Paxos itself.
Sharing stablecoin revenue with distributors
In July we published a feature on the M^0 stablecoin network, highlighting its plans to share revenues with distributors. We noted that this was likely to become more widespread amongst stablecoin issuers.
This is the model which could challenge the two leading stablecoins, Tether and USDC. Tether has made more than $7 billion in profit in the first three quarters of this year.
Paxos may be not be the largest stablecoin issuer, but it has a strong market presence and a track record that includes issuing Binance USD, Paxos dollar and Paxos gold. Plus, it holds a New York regulated trust charter in addition to registrations in Singapore and Dubai.
With partners like Robinhood and future partners likely to include payment providers, exchanges and investment platforms, GDN’s revenue sharing model will probably significantly expand the adoption of stablecoins beyond web3 use cases.
Robinhood’s Johann Kerbrat said the network aligns “with our commitment to making financial access easier and more inclusive.” Robinhood was rumored to launch a stablecoin, but if the revenues are shared, it’s far easier to become a distributor.
“Stablecoins are replatforming the financial system and revolutionizing how people interact with US dollars and payments,” said Charles Cascarilla, CEO and Co-Founder of Paxos.
“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.”
A stablecoin disruptor
Incentivized distribution is one of the underappreciated disruptors we highlighted in our report on bank stablecoins, tokenized deposits and DLT payments.
Another novel aspect of the stablecoin is its issuance in Singapore. Tether is based offshore, but is used in the United States, apart from specific states where it’s banned (eg. New York). So there’s no reason why USDG can’t be used onshore as well.
