Paxos Expands Stablecoin Infrastructure With USDG Network

The stablecoin market is experiencing unprecedented demand as regulatory clarity emerges across major jurisdictions. Paxos, a blockchain infrastructure company, has been at the forefront of this transformation since 2018.

The firm pioneered white-labelled stablecoin issuance and now operates the Global Dollar Network. This network powers USDG, a regulated stablecoin designed for institutional adoption.

Ronak Daya, Head of Product at Paxos, reveals that customer demand has fundamentally shifted. "Everyone wants a stablecoin," he says. "But there's a lot that goes into creating a stablecoin."

The infrastructure challenge is substantial. Stablecoins are networks that require careful management and growth strategies. Many organisations want the benefits but lack the resources to build from scratch.

Paxos identified this gap early. When PayPal, the digital payments giant, launched its own stablecoin in 2023, it marked a watershed moment for the industry. The move signalled that mainstream financial institutions were ready to embrace digital dollar infrastructure.

Rather than requiring every customer to launch their own token, Paxos offers an alternative approach. The Global Dollar Network allows companies to leverage existing infrastructure and begin realising benefits immediately.

"We try to capture all of that demand into the Global Dollar Network and USDG," Ronak explains. "We still do white labels, but the right answer for a lot of people is to leverage an existing stablecoin."

The network currently includes over 90 partners. This ecosystem approach addresses several critical needs: onboarding and offboarding capabilities, utility across multiple platforms, broader ecosystem adoption, exchange listings, and decentralised finance integration.

Ronak says the thesis was straightforward. "Most companies are going to want a stablecoin like what PayPal got," he notes. "Why customers wanted it is because they want to integrate it within their own ecosystem."

Companies gain economic benefits whilst accessing a regulated asset they can trust. They maintain control over integration whilst avoiding the heavy lifting of network building.

Growing adoption across exchanges and payments

Adoption is growing across multiple sectors. Kraken, the cryptocurrency exchange, integrated USDG into its core workflows and launched Kraken Pay. Robinhood, the trading platform, has similarly incorporated the stablecoin.

OKX, another major exchange, integrated USDG into its order book system. The platform is launching yield and reward programmes built on the infrastructure. Payment companies are leveraging it for money movement use cases.

Decentralised finance platforms have found particular value. These DeFi players now have mechanisms to monetise transaction flow passing through their systems. The network currently holds just under one billion dollars in assets under management.

Ronak continues: "It's still early. A lot more work to be done."

Regulatory clarity accelerates market timelines

Regulatory developments have accelerated adoption timelines. Recent legislation, including the Markets in Crypto-Assets regulation in Europe and proposed stablecoin frameworks in the United States, have eliminated uncertainty.

"We've always seen demand, but the time from consideration to getting started is shrinking," Ronak reveals. Previously, companies cited regulatory uncertainty as justification for delays. That air cover has disappeared.

USDG achieved compliance across multiple jurisdictions early. The stablecoin holds licences under MiCA, making it one of the first assets approved across both US and European regulatory frameworks.

"We'll see a lot more demand and interoperability between US and Europe rails," Ronak says. Cross-border functionality remains in early stages but represents significant opportunity.

Expanding brokerage infrastructure for traditional finance

Beyond stablecoins, Paxos is expanding its brokerage infrastructure. The company offers crypto-as-a-service solutions for traditional financial institutions. This includes custody, trading services, liquidity management, and trade execution capabilities.

The removal of Staff Accounting Bulletin 121 by the Securities and Exchange Commission eliminated a major barrier. SAB 121 required institutions to hold equivalent cash reserves for cryptocurrency holdings, making custody economically unfeasible.

"Now that that's gone, we're seeing every FI think about what it means to offer crypto services," Ronak explains. Large financial institutions are witnessing customer outflows to dedicated cryptocurrency platforms.

Exchange-traded funds provide exposure, but many customers prefer direct ownership of underlying assets like Bitcoin and Ethereum. Building this capability internally requires significant time and resources.

Paxos powered cryptocurrency services for PayPal and Interactive Brokers. The infrastructure integrates with existing stablecoin offerings, creating a comprehensive digital asset platform.

Demand is emerging from fintechs, payment companies, neobanks, and traditional banks. Most organisations are waiting for early movers to validate the approach before committing.

"No one wants to go first, everyone wants to be second or fourth," Ronak reveals. "We'll see a bunch of these launch in Q1 or through early parts of next year."