Crypto firms including Robinhood, Kraken launch global stablecoin network


The logo of Robinhood Markets, Inc. is seen at a pop-up event on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly/File Photo

(Reuters) - A consortium of financial technology and cryptocurrency companies including Robinhood, Kraken and Galaxy Digital on Monday introduced a joint stablecoin pegged to the U.S. dollar.

The aim of the newly formed Global Dollar Network is to accelerate usage of stablecoins worldwide and promote an asset that provides proportionate economic benefits to its partners, the companies said.

WHY IT'S IMPORTANT

Stablecoins are digital tokens designed to keep a constant value. They are backed by traditional currencies such as the U.S. dollar or euro.

As cryptocurrencies like bitcoin have rocketed in value this year thanks to forecasts for lower U.S. interest rates and the introduction of new crypto exchange-traded products, more companies have devoted resources to promoting stablecoins.

Stablecoins are often used for converting crypto tokens into traditional currencies because they are shielded from the wild price fluctuations seen in other cryptocurrencies.

CONTEXT

The Global Dollar Network is based around a new stablecoin called USDG, which will be issued out of Singapore by crypto platform Paxos. The token will be governed by a committee made of representatives from the network's partners, which also include Anchorage Digital, Bullish and Nuvei.

USDG will face the uphill task of elbowing into a concentrated market where the two biggest players - Tether and USD Coin - account for nearly 90% of the total market capitalization, according to data from CoinGecko.

The move from the firms involved comes as crypto players largely anticipate U.S. officials warming to digital assets, regardless of who wins the presidential election on Tuesday.

KEY QUOTE

"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," Paxos CEO Charles Cascarilla said.

(Reporting by Hannah Lang in New York; Editing by Alison Williams)

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Tech News

Sirius XM found liable in New York lawsuit over subscription cancellations
US Supreme Court tosses case involving securities fraud suit against Facebook
Amazon doubles down on AI startup Anthropic with $4 billion investment
Factbox-Who are bankrupt Northvolt's creditors?
UK should use new powers to probe Apple-Google mobile browser duopoly, report says
EU regulators scrap probe into Apple's e-book rules after complaint was withdrawn
Hyundai recalls over 145,000 electrified US vehicles on loss of drive power
'World of Warcraft' still going strong as it celebrates 20 years
Northvolt CEO steps down, saying group needs up to $1.2 billion
Bitcoin at record highs, sets sights on $100,000

Others Also Read