Paxos International Launches Yield-Bearing Stablecoin on Arbitrum
Arbitrum
Paxos
Stablecoin
The USDL launch allows users and developers within the Arbitrum network to unlock the benefits of a stablecoin that distributes yield natively.
Last updated:
October 9, 2024 09:54 EDT
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Sead Fadilpašić
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Sead Fadilpašić
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Last updated:
October 9, 2024 09:54 EDT
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Paxos International, a UAE-based affiliate of
Paxos
, announced that the yield-bearing stablecoin issued by a regulated entity – Lift Dollar (USDL) – is now available on the popular Layer 2 chain
Arbitrum
.
According to the press release shared with
Cryptonews
, the USDL expansion onto the
Ethereum
scaling solution Arbitrum unlocks “safe yield and cost-effective, fast transactions for a robust gaming, social, and DeFi ecosystem.”
This launch represents a significant moment in the future of DeFi, as it allows users and developers within the Arbitrum network to unlock the benefits of a stablecoin that natively distributes yield.
Ronak Daya, Head of Product at Paxos, said that “by expanding to Arbitrum, we’re offering Ethereum-level security with faster, cheaper transactions.”
A.J. Warner, Chief Strategy Officer at
Offchain Labs
, the team behind Arbitrum, commented that USDL is the latest to join the stablecoins available on the network.
Also, this asset class continues to grow, and Arbitrum’s DeFi-native environment relies upon it “heavily.”
Warner said that adding a regulated, yield-bearing stablecoin to Arbitrum allows “ecosystem innovators to build the next generation of applications and use cases” and drives “a new standard of DeFi on the network.”
Notably, this stablecoin is not available to residents of several large jurisdictions.
These include the United States, the United Kingdom, the European Union, Canada, Hong Kong, Japan, Singapore, and the United Arab Emirates, except the Abu Dhabi Global Market (ADGM).
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Encouraging Broad Stablecoin Adoption
Paxos International is a regulated entity under the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM).
Under this license, Paxos International must maintain a 1:1 parity between USDL and USD.
It must hold high-quality liquid assets to back USDL–USD deposits, short-duration US treasuries, and cash equivalents. Customer can redeem their USDL for fiat at all times, it said.
The Paxos affiliate company
introduced the USD-backed USDL
in June 2024. It said it would partner with global exchanges, wallets, and platforms to distribute the coin to individuals and institutions.
Paxos’ Daya commented that the stablecoin “combines the stability of US dollars with blockchain efficiency, democratizing access to safe yield.”
Additionally, holders directly benefit from yield earned on Reserve. USDL distributes yield from its cash and cash equivalent reserves to its holders daily.
This approach encourages broad stablecoin adoption and industry expansion, the announcement said.
Meanwhile, Paxos is the issuer of several regulated digital assets. These include PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG).
It is regulated by the New York Department of Financial Services (NYDSF) in the US, the Monetary Authority of Singapore (MAS) in Singapore, and FSRA in the Abu Dhabi Global Market.
The fintech company said it raised more than $540 million. Investors include Oak HC/FT, Declaration Partners, Founders Fund, Mithril Capital, and PayPal Ventures.
It also partners with major global enterprises to tokenize, custody, trade, and settle assets.
Its blockchain solutions are used by the likes of PayPal, Interactive Brokers, Mastercard, Mercado Libre, and Nubank.
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