Paxos’ $3B USDG Stablecoin Launches on Arbitrum

Paxos’ USDG stablecoin has launched natively on Arbitrum One, bringing the token to the Ethereum layer-2 network and connecting it with decentralized finance protocols.

USDG is integrated with Fluid, Morpho, GMX and Maple on Arbitrum. Kraken will support deposits and withdrawals, while Stargate will enable transfers between Arbitrum and other blockchains.

The launch follows Arbitrum’s entry into the Global Dollar Network, a group of companies and blockchain networks supporting USDG adoption. Arbitrum will receive a share of rewards generated by USDG activity on its network. The proceeds will support adoption programs and ecosystem development.

A proposal submitted to the ArbitrumDAO would make USDG growth a strategic objective and allocate 100 million ARB tokens to an incentive program. It would also use assets from Arbitrum’s treasury to support USDG liquidity. Companies integrating USDG could apply for additional support from the Arbitrum Foundation.

About $4 billion in stablecoins are held on Arbitrum, according to the Arbitrum Foundation. USDG is the seventh-largest stablecoin by market capitalization, with about $3.09 billion in circulation, according to DeFiLlama data. Most of its supply is held on X Layer, Robinhood Chain and Solana.

The launch comes as Arbitrum expands its use in tokenized real-world and financial assets. Robinhood Chain, an Arbitrum-based network, launched its public mainnet in July after a public testnet began in February. The network is designed to support tokenized assets, 24-hour trading, lending markets and perpetual futures exchanges.

Standard Chartered has estimated that tokenized assets could reach $4 trillion by the end of 2028. The bank also described an economic model for Robinhood Chain under which Arbitrum would receive 10% of net protocol revenue generated by companies building on its infrastructure.