Paxos International Launches Stablecoin USDL Yields About 5% Interest
Summary:
Paxos International is launching a stablecoin called the Lift Dollar (USDL), regulated by Abu Dhabi Global Market and backed by liquid U.S. government securities and equivalent cash reserves. The USDL does not require U.S. Securities registration and targets a yield of about 5%. However, it's not available in the U.S, outside the ADGM in the UAE, the UK, the EU, Canada, Hong Kong, Japan, and Singapore. Additionally, Paxos who also mints PYUSD, USDP, and PAXG discontinued minting BUSD due to threatened action over issuing an unregistered security.
Global financial institution Paxos International is launching a new interest-accruing stablecoin, named the Lift Dollar (USDL). The U.S. dollar-backed USDL will be regulated within the Abu Dhabi Global Market (ADGM), with the overnight yield deriving from the interest Paxos International accrues from its reserve assets. These reserves, composed of highly liquid US government securities and cash equivalents, are maintained in alignment with the ADGM's Financial Services Regulatory Authority regulations.
Instead of collecting interest from such reserves, Paxos International will impose an issuer fee. Beyond the ADGM, key players including Ripio, Buenbit, Manteca and Plus Crypto will make USDL accessible in Argentina. The organization claims the initiative to be the first regulated interest-yielding stablecoin.
The Ethereum smart contract, utilizing a rebasing mechanism, will automatically generate yield for USDL, fluctuating based on market conditions. Bloomberg has estimated a yield close to 5%. Despite this, U.S. residents, alongside those living outside of the ADGM in the UAE, the United Kingdom, the European Union, Canada, Hong Kong, Japan, and Singapore, won't have access to USDL.
Paxos International clarified, "The digital assets mentioned here will not be registered under the US Securities Act of 1933, and won't be available in the US barring any exemption from registration."
Operating under the regulation of the New York Department of Financial Services, Paxos, based in New York, has previously minted the PayPal USD (PYUSD), Pax Dollar (USDP) and Pax Gold (PAXG). However, when the NYDFS and United States Securities and Exchange Commission hinted at an intervention over the issuance of an unregistered security, Paxos discontinued minting the Binance USD (BUSD).
The ADGM economic zone in Abu Dhabi, established in 2013, has been rapidly expanding. The economic zone initiated its comprehensive distributed ledge technology regulations in November and established a partnership with Solana this February. Numerous digital asset companies, including Rain, M2, Laser Digital, Binance FZE and QCE Capital, have been licensed within the ADGM in the past 12 months.
Published At
6/5/2024 11:56:13 PM
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