Just when we thought USDT would forever reign supreme as the king of stablecoins, some TradFi and crypto companies are planning a coup. Robinhood, Galaxy Digital, Kraken, and Paxos, among others, announced a new stablecoin on the 5th of November, which they are calling USDG, or Global Dollar Network.

Their goal—besides being the next USDT killer—is to build an open network that would allow crypto-compliant transactions for the global market. Also, the doors are open to new partners who can contribute to the network in the future.

Why should we care about USDG?

And that’s a good question because, c’mon, we’ve got USDT and USDC holding down the market. Even PayPal recently launched their own PYUSD. The stablecoin market is a huge $179 billion industry on its own as per CoinMarketCap.

The thing is, while these stablecoins have been roaming free, most of them aren’t really compliant with existing—or rather, nonexistent—laws. For instance, there was a class action lawsuit against Tether, the issuers of USDT, back in 2023, which a judge threw out—luckily.

And we all know how BUSD faded out of the market after Gary Gensler and his boys at the SEC knocked on Paxos’ doors (remember this name), among other things.

So, these companies are bringing in USDG to be a bullet-proof stablecoin that could please the government and still do its job as a dollar-backed stablecoin. Pretty ambitious, right?

So who would be issuing USDG?

Here’s where things get wicked: Paxos, the same guys that were bundled up in the BUSD case would be the ones to issue USDG—oh, and they also issued PYUSD for PayPal. 

But this time, they’re doing something different. All USDG tokens will be issued OUT of Singapore… 

Surely, we all know why they are going this route. No one wants to deal with the US and their crazy non-regulations anymore. In fact, tons of crypto companies are now leaving the United States in favor of Asia.

To top it off, customers in the US are also getting walled off and I strongly believe it’ll be the same thing with USDG, at least for the time being. For instance, KrakenPro already listed USDG and there’s a “geographical restriction” in place.

Will USDG succeed or fail?

No doubt, competition is really tight. When it comes to stablecoins, USDT and USDC currently control almost 90% of the total market cap. That’s pretty huge for just two companies.

The other 10% or so is controlled by DAI (gold-backed token) and some others. And there’s PYUSD, which hasn’t really seen so much traction since PayPal announced it.

So predicting where USDG would go is not so feasible at the moment. Though I believe that it’ll get some traction, especially since many industry heavyweights are backing it. Plus, USDG plans to share reserve income with participants who help boost the network's liquidity and adoption. 

This is wayyy different from what the competitors are currently operating, where they keep their interest to themselves. So, this little incentive may just be what USDG needs to take on the titans.

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