Regulation
Crypto trading firm Paxos unveils yield-bearing stablecoin USDL
Cryptocurrency trading platform Paxos has introduced a yield-generating, USD-denominated stablecoin called Lift Dollar (USDL), regulated in the United Arab Emirates (UAE), the company announced on Wednesday.
The stablecoin is issued by Paxos International, the company’s UAE division, and regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM).
The largest stablecoin issuers, such as Tether and Circle, collect billions of dollars in interest on the Treasuries they hold, leading to the creation of several sharing of returns stable coins and blockchain-based U.S. Treasury products.
Paxos CEO Charles Cascarilla said the new Lift Dollar is structured similarly to the other stablecoins his company issues: PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). These are dollar-matched 1:1, backed by short-term US government securities, and all are supervised by a prudential regulator and all assets are positioned safely away from a potential bankruptcy situation, did he declare.
“We added a programmatic daily yield, so it feels a little bit more like a savings product than a checking account product, which is maybe the way to think about traditional stablecoins,” Cascarilla said in an interview. “[USDL] goes even further by democratizing access to the dollar, by also democratizing the risk-free rate, in the safest way possible.
Paxos USDL will not be available in the United States due to lack of regulatory guidance.
Upon launch, USDL will have a particular focus on Argentina, where it will be available to consumers through distribution partners Ripio, Buenbit and TiendaCrypto, according to a press release.
“For launch, we are waiving the 30 basis points (bips) of our asset management fees. So we only keep 20 beeps, which means users will get more than 5%,” Daya said in an interview.