- Initial European distribution partners include Kraken and Gate.
- Paxos shares most revenues from USDG reserves with its distributors, a new approach in the stablecoin market.
- USDG has issued $320 million globally and works with major partners such as Anchorage Digital, Fiserv, Mastercard, Robinhood, and Worldpay.
- Paxos manages regulatory requirements by separating EU and global reserves, but officials in the EU have concerns about this method.
Paxos has rolled out the Global Dollar stablecoin (USDG) in the European Union, ensuring compliance with local MiCA regulations. The company now offers USDG to European users through major distribution partners such as Kraken and Gate.
The company declared that USDG is fully regulated and meets the area’s consumer protection standards. “USDG is a fully regulated global USD-stablecoin that is compliant with MiCA and now available in the EU,” stated Walter Hessert, Head of Strategy at Paxos. USDG’s total issuance so far is $320 million. Paxos has also partnered with leading firms around the world, including Anchorage Digital, Fiserv, Kraken, Mastercard, Robinhood, and Worldpay.
Unlike many stablecoin issuers, Paxos shares most revenue generated from stablecoin reserves with its distribution partners. According to the company, this business model is different from most others in the industry. The company says it wants to expand compliance and safety standards to all users in the EU, aiming to reach over 450 million consumers.
USDG was initially introduced under Singaporean regulations. In the previous year, Paxos acquired Finland’s Membrane Finance, which had a MiCA license. The Finnish entity was renamed to Paxos Issuance Europe, allowing additional access to the European market.
MiCA rules require stablecoin issuers to hold a portion of reserves, in this case 30%, as cash in banks in the EU. While USDG holds backing assets for European-issued tokens, only one smart contract on each blockchain handles issuance worldwide. Paxos manages daily and weekly reserve rebalancing to stay in line with regulations, collecting regular reports from crypto exchanges active in the European market.
Some EU lawmakers are concerned about how reserves are balanced across regions. They worry that, during a crisis, non-EU residents might redeem USDG in Europe because the process could be less expensive and more accessible. Lawmakers intentionally designed MiCA to prevent non-EU issuers from operating under EU rules but are debating whether the current reserve rebalancing process follows that intention.
For full details visit Paxos.
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