As a researcher with a background in finance and experience in the digital currency space, I find the introduction of Paxos’ new stablecoin, USDL, particularly intriguing. The yield-generating mechanism sets it apart from other stablecoins, making it more than just a checking account product but a savings one as well. This innovation could significantly benefit users in regions with volatile currencies, such as Argentina, where access to stable assets is crucial.
Paxos Trust Company, the organization behind well-known stablecoins such as PayPal USD (PYUSD), Pax Dollar (PUSD), and Pax Gold (PAXG), has introduced a new stablecoin called USD Lift (USDL). This new digital currency will be disseminated by Paxos International, which is based in the United Arab Emirates.
Charles Cascarilla, the CEO of Paxos, described USDL as a digital currency that pays out interest to its holders, making it function more like a savings account than a traditional checking account. This yield-generating stablecoin has been approved by the Financial Services Regulatory Authority (FSRA) in the Abu Dhabi Global Markets (ADGM).
As a stablecoin analyst, I’m excited to share that our stablecoin will expand its reach beyond its initial offering, with a particular emphasis on Argentina. Argentineans have shown a strong affinity towards cryptocurrencies and USD-backed stablecoins due to their currency’s volatility. Users in Argentina can easily engage with the asset using popular platforms such as TiendaCrypto, Ripio, and Buenbit. However, US users will not be able to access the stablecoin at this time due to the regulatory uncertainty surrounding cryptocurrencies in the United States.
Ronak Daya, the Product Head at Paxos, announced that they will launch their service in Argentina soon, providing millions of token holders with a secure way to access US dollars. This new feature will not only allow them to save and conduct transactions but also earn daily interest. We are excited to collaborate with these reliable partners and anticipate expanding our partnerships further in the upcoming year.
As a researcher studying stablecoins and their issuers, I can tell you that Paxos, similar to other trusted entities in this field, holds reserves of cash and cash equivalents like treasury bills to support its stablecoin, US Dollar Stablecoin (USDL), at a 1:1 ratio. The interest earned from these assets contributes significantly to the company’s profits, amounting to billions. A portion of these profits will be passed on to USDL users as yield. In his own words, Paxos CEO, Cascarilla, expressed, “I am proud to say that we are not just democratizing access to dollars with USDL but also the risk-free rate in a secure manner.“
As a researcher studying decentralized finance (DeFi), I can tell you that US Dollar Stablecoin (USDL) from Paxos will be integrated into Ethereum‘s network. This integration enables users to generate daily rewards through the smart contracts on Ethereum. Paxos intends to expand the scope of blockchain-driven reward generation with USDL, offering low-risk opportunities while harnessing the transparency and accessibility that characterizes blockchain technology.
Image by Steve Buissinne from Pixabay
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2024-06-06 17:04