Paxos International, a UAE-based affiliate of Paxos, recently announced the availability of its yield-bearing stablecoin, Lift Dollar (USDL), on the popular Layer 2 chain Arbitrum. This move is expected to unlock safe yield and cost-effective, fast transactions for the gaming, social, and DeFi ecosystem within the Arbitrum network. The expansion to Arbitrum offers Ethereum-level security with quicker and cheaper transactions, allowing users and developers to tap into the benefits of a stablecoin that distributes yield naturally.
The Head of Product at Paxos, Ronak Daya, expressed excitement about the expansion to Arbitrum, highlighting the combination of Ethereum-level security with enhanced transaction speeds. A.J. Warner, Chief Strategy Officer at Offchain Labs, the team behind Arbitrum, also lauded the addition of USDL to the network, emphasizing the importance of stablecoins in the DeFi environment. With this move, ecosystem innovators can build innovative applications and use cases, setting a new standard for DeFi on the network.
Despite the promising opportunities presented by USDL on Arbitrum, the stablecoin is not accessible to residents of certain major jurisdictions, including the United States, the United Kingdom, the European Union, Canada, Hong Kong, Japan, Singapore, and the United Arab Emirates, except for the Abu Dhabi Global Market (ADGM). This restriction implies that users from these regions will not be able to benefit from the yield-bearing stablecoin on the Arbitrum network.
Paxos International, as a regulated entity under the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), maintains a 1:1 parity between USDL and USD. The company must hold high-quality liquid assets to back USDL–USD deposits, ensuring that customers can redeem their USDL for fiat currency at all times. This commitment to transparency and security adds a layer of trust for users interacting with the stablecoin.
The introduction of USDL in June 2024 marked Paxos International’s venture into the stablecoin market. The company plans to collaborate with global exchanges, wallets, and platforms to distribute the coin to a wide range of individuals and institutions. By combining the stability of US dollars with blockchain efficiency, USDL aims to democratize access to safe yield, allowing holders to benefit directly from the yield earned on reserves. This approach is expected to foster broad adoption of stablecoins and contribute to the growth of the industry.
As a regulated issuer of digital assets, Paxos offers other stablecoins like PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). The company is regulated by financial authorities in the US, Singapore, and the Abu Dhabi Global Market, ensuring compliance with industry standards and regulations. With a track record of raising significant investments and partnering with major global enterprises, Paxos continues to drive innovation in the blockchain and fintech space, providing secure and reliable solutions for asset tokenization, custody, and trading.
