Altcoin Spotlight: What is USDG (Global Dollar)?

Here at MintDice.com, we are committed to customer education, which is why we closely monitor the top 60 cryptocurrency tokens by market cap as listed on CoinMarketCap.com and make profiles for any tokens that break the top 60 positions.

This week, USDG, a stablecoin that has actually been around for several years, has made its way to the top 30 positions. Read on to learn everything you need to know about USDG (Global Dollar) and whether or not you should invest.

What is USDG?

First and foremost, USDG is an abbreviation short for US Dollar Global, and it is a US dollar-pegged stablecoin. This means any USDG issued is backed on a 1:1 basis with US dollars.

USDG is specifically associated with the DeFi platform Paxos, and can be used as currency on the website for certain transactions.

In simple terms, USDG is a digital version of the US dollar that can be used on blockchain platforms.

How Does USDG Work?

USDG runs using ERC-20 token standards and is deployable across several blockchains. The ones it specifically mentions are Ethereum, Solana, X Layer, and Ink. It is also usable on its native blockchain, Paxos.

When USDG is purchased or traded for on the Paxos platform, an equal number of US dollars is placed in a separate account to serve as the backing for the digital currency. Unlike other stablecoins, USDG is fully backed and operates under the supervision of MAS (Monetary Authority of Singapore). As such, the amounts in the accounts used to claim backing are regularly and independently audited.

Additionally, MAS ensures that any funds dedicated to USDG backing is 100% separate from the issuer’s existing funds (like PAXOS tokens, for example) and that access to the fund is severely restricted and safe from malicious actors. This is not surprising as Paxos advertises itself as regulated blockchain infrastructure.

Currently, USDG is fully compliant with MiCA regulations in addition to MAS regulations making it fully legal to use in the EU and in Singapore.

If that weren’t enough, USDG also promotes a yield-sharing model where profits of the revenue generated by the stablecoin are distributed among shareholders and partners. Current partners of USDG include Kraken, Robinhood, and several other large names in decentralized finance.

Who Created USDG?

USDG was created by the creators of the Paxos network and launched on November 1, 2024. The creation of this stablecoin was a direct result of increasing demand, and Paxos wanted a stablecoin associated with its platform to make adaptation easier for users. They also hoped to increase platform use by including easy integrations with other related platforms.

Backing for USDG is held in DBS Bank in Singapore, which is where the company behind Paxos is located.

Should You Buy USDG?

In general, we do not advise positively for the purchase of stablecoins—but not always for nefarious reasons.

The reality is, most individuals don’t understand stablecoins and their differences from other cryptocurrency holdings. Stablecoins are not investment vehicles, and are not worthy of adding to your portfolio. This is because they will never increase in value unless the underlying currency does, and we typically find that an investment in something else (even fiat ETFs) is a better use of your time and money.

That being said, if there were any stablecoin you were interested in purchasing just for use, USDG is definitely one you should consider. Not only is USDG available on many platforms and can be used for on-platform exchange, but it is one of the only stablecoins we trust. Other stablecoins say they are backed on a 1:1 basis (Tether) when that isn’t the case, leaving users in a precarious situation financially.

We love that USDG is fully backed by fiat currency and that it is regularly audited to ensure its compliance. We also like that some of the revenue made is returned to partners. Although we love it as a stablecoin, it is still only that, a stablecoin.

So, unless you have the knowledge and funds to become a partner, we generally advise against going all in on a stablecoin. But, if you need it to transact on a website, we definitely think USDG is a safer choice than most other stablecoins, and residents of the EU and Singapore should definitely look into it.

**Additionally, if you want something backed by the same people who made USDG but want it to be something investment worthy, we recommend considering PAXG or Pax Gold, which is a stablecoin backed by gold bars that can allow your investment to be net positive.

Where Can You Buy USDG?

We always advise purchasing cryptocurrencies from a platform you are already registered with and know and trust. If you don’t have an exchange platform yet, you can consider the following, which will also allow you to purchase USDG.

·      Kraken

·      Aave

·      Gate.io

·      KuCoin

·      OKX

·      Paxos

These are only a few of the platforms that offer USDG trading pairs or the exchange of USD for USDG. We did not list all of the platforms that carry USDG, and new ones are adding the stablecoin every day—which is why we advise checking your favorite platform first.

Most of the platforms we listed do allow the purchasing of USDG with debit cards, bank transfers, and other cryptocurrencies, though exact trading pairs available will vary.

Overall, though stablecoins aren’t really our thing, you definitely could do worse than USDG. At least USDG is regulated and regularly audited, so users know they aren’t being taken advantage of. If you have need of a stablecoin, USDG is definitely the one to go for, just know that you aren’t purchasing an investment—you’re just purchasing a digital version of the US dollar.