Key Takeaways
- Visa is set to join the USDG stablecoin consortium as the first traditional finance company.
- USDG aims to offer shared yield and differentiate from competitors like USDT and USDC.
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Visa will be part of the Global Dollar Network (USDG), a stablecoin consortium established by Paxos, with participation from crypto and fintech giants such as Robinhood, Kraken, and Galaxy Digital, CoinDesk reported Monday, citing two people with knowledge of the plans.
If confirmed, the payments giant will become the first TradFi player to back the initiative. The consortium’s existing members include Robinhood, Kraken, Galaxy Digital, CoinDesk’s owner Bullish, Anchorage Digital, and payments platform Nuvei.
Introduced last November, the initiative is focused on promoting stablecoin adoption and advancing its real-world applications.
The network uses Paxos’s new stablecoin, the Global Dollar (USDG), which operates under the Monetary Authority of Singapore’s (MAS) regulatory framework. DBS Bank, Southeast Asia’s largest bank, serves as the custodian and banking partner, managing reserves to ensure full backing and on-demand redemptions.
The stablecoin was initially launched on Ethereum, with support for other MAS-approved blockchains like Solana on the roadmap.
USDG aims to differentiate itself in a market dominated by Tether’s USDT and Circle’s USDC by sharing yield with participant firms that create connectivity and liquidity.
The consortium’s stablecoin maintains a 1:1 peg with the US dollar, backed by high-quality liquid assets including dollar deposits and short-term US government securities. Paxos publishes monthly reserve reports to verify full backing.
Visa’s stablecoin push follows an earlier report of the firm’s engagement with World Network, formerly known as Worldcoin. The focus was on integrating card features into the World’s self-custody crypto wallet.
The collaboration with Visa would enable World Wallet users to access fintech services, fiat on-and-off ramps, and make stablecoin payments through Visa’s global merchant network.
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