Emre Yumlu 
Global Dollar (USDG) is a regulated stablecoin that bridges fiat and digital assets, combining the infrastructure, oversight, and stability of traditional finance with the speed, efficiency, and transparency of the internet. Issued by Paxos Digital Singapore Pte. Ltd. (PDS), USDG is subject to oversight by the Monetary Authority of Singapore (MAS) and complies with its forthcoming stablecoin framework. Designed for payments, settlements, and treasury operations, USDG is issued as an ERC-20 token on Ethereum and other MAS-approved Layer 1 and Layer 2 blockchains. In this article, we explore what USDG is, how it functions, and the opportunities it offers.
What is Global Dollar (USDG)?
USDG is a single-currency stablecoin pegged to the US dollar, fully redeemable from Paxos at a 1:1 ratio (1 USDG = 1 USD). Issued as an ERC-20 token on Ethereum and using standard token protocols on other MAS-approved blockchains, it ensures seamless integration with exchanges and third-party applications.
Key features of USDG include:
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Accessibility: Anyone with an Ethereum-compatible wallet can send or receive USDG, breaking down barriers to traditional banking access.
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Speed: Transactions settle in minutes on Ethereum and other high-speed networks, far faster than traditional fiat transfers that can take days.
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Programmability: Operating under ERC-20 rules, USDG supports smart contracts, enabling developers to build new use cases, products, and services.
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Stability: Pegged to the US dollar, USDG’s reserves are held in segregated accounts by PDS, protecting holders’ assets in the unlikely event of insolvency.
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Regulated Issuer: PDS holds a MAS Major Payment Institution license, offering digital payment token services and meeting stablecoin framework requirements for value stability, capital, par redemption, and disclosures.
USDG’s reserves, consisting of cash and cash equivalents, are held in segregated accounts; US dollars are T+0 liquid. US Treasury securities (USGs) with less than three months to maturity are highly liquid, while reverse repurchase agreements (repos) are overcollateralized with USGs and limited to one business day. Institutional Stable NAV USD Government Money Market Funds (MMFs) include cash, USGs, and overnight repos with a weighted average maturity (WAM) of 60 days and weighted average life (WAL) of 120 days.
Purpose of Global Dollar (USDG)
USDG aims to foster a fair and open financial system through regulated stablecoins. Over the past five years, the stablecoin market has grown 15x to over $160 billion, with projections to reach $3 trillion in the next five years. Blockchain advancements in speed and cost-efficiency make stablecoins ideal for payments and real-time money movement. Announcements like PayPal’s PYUSD and Stripe’s adoption of stablecoins for payments highlight strong enterprise demand.
Many existing stablecoins lack high regulatory standards, hindering enterprise adoption. USDG, under MAS oversight, offers robust consumer protection and compliance, reducing the cost and friction of enterprises issuing their own stablecoins. Its cash and cash-equivalent reserves are held in segregated accounts, safeguarding USDG holders in case of PDS insolvency.
How Does Global Dollar (USDG) Work?
USDG is issued and redeemed at a 1:1 ratio with USD; PDS mints tokens when funds are deposited into a reserve bank account. Other USDG transactions are managed by smart contracts under ERC-20 or approved blockchain protocols. The USDG smart contract is audited by independent third parties and viewable on Etherscan.
Reserves: USDG is fully redeemable, with reserves matching the circulating supply 1:1. Cash is held in segregated bank accounts; USGs with less than three months to maturity are liquid. Repos, overcollateralized with USGs, have a one-business-day maturity limit; MMFs include cash, USGs, and overnight repos with 60-day WAM and 120-day WAL.
Reserve Investment Policy: Paxos prioritizes asset safety and liquidity, implementing intraday liquidity management. Single-bank exposure, liquidity needs, and redemption timelines are assessed. The portfolio follows a buy-and-hold strategy, with liquid, short-maturity assets enabling flexible cash flow management.
Auditing and Verification: An independent accounting firm conducts monthly reserve attestations, published on the Paxos website and submitted to MAS. Verification includes: checking USDG total supply via blockchain, confirming USD balances with banks, matching internal PDS records, verifying reserve excess, drafting and signing reports, and publishing them.
Transaction Monitoring and Oversight: Continuous monitoring for fraud detection and prevention is performed using Chainalysis, with public blockchain transaction history accessible to all.
Global Dollar (USDG) Use Cases
USDG delivers the benefits of fiat-backed stablecoins: accessibility (available outside banking hours), access (usable with Ethereum wallets), speed (settles in minutes), and programmability (enables new smart contract applications).
USDG stands out from other USD stablecoins with: MAS-regulated issuance, partnerships with banks like DBS, experience issuing PayPal USD under New York Department of Financial Services, and issuance of Lift Dollar (USDL) under ADGM Financial Services Permission.
Risks: USDG or its reserves may be frozen, seized, or forfeited for illegal or sanctioned use. Consumer risks include: public blockchain delays, third-party software failures, irreversible transactions, and private key loss.
Global Dollar (USDG) Tokenomics
USDG is backed 1:1 with USD reserves, matching circulating supply. Reserves, held in segregated accounts with cash, USGs, repos, and MMFs, remain liquid. Monthly attestations, quarterly/annual audits, and on-demand verifications ensure transparency.
Global Dollar (USDG) Partners
Global Dollar (USDG) partners include a diverse range of finance and blockchain companies: 1Money, Aleo, Alfred, Alpaca, Amina, Anchorage Digital, Aquanow, Arculus, August, Beam, BiLira, Bitmart, Bitnet, Bitwyre, Bullish, Caliza, Coinmena, Coinmetro, Coinspaid, Dtc Pay, Equitiestracker, Facilita Pay, Fomo Pay, Galaxy, Gate, Hercle, Hifi, Huma, Kraken, Loopcrypto, Ltp, Merj, Midas, Noah, Nuvei, OKX, Onramp, OnRe, Orbital, Paribu, Paxos, Pdax, Rain, Rakkar, Robinhood, Sling Money, Swissborg, Toku, Topos, Trace Finance, Triple-a, Velocity, Wallectconnect, Worldpay, and Zodia Custody.
Global Dollar (USDG) Team
The Global Dollar Network is an open platform to accelerate USDG adoption, issued by PDS under MAS oversight. Paxos, a regulated stablecoin issuer since 2018, has minted over $120 billion in stablecoins. It operates under a New York Trust Charter and ADGM Financial Services Permission.
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