- Argentina is the first market for Paxos International’s yield-bearing stablecoin, Lift dollar (USDL).
- During the conversation, Ronak Daya of Paxos stated that users can currently receive a dividend of roughly 5% on USDL.
With Argentina as its first market, Paxos International, a branch of Paxos with headquarters in the United Arab Emirates, has introduced Lift dollar (USDL), a yield-bearing stablecoin.
According to Paxos International on Wednesday, USDL is distributed permissionlessly on Ethereum and pays yield to token holders programmatically every day, provided that reserve assets completely support the whole value of USDL in circulation.
According to Paxos International, USDL is regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) and is backed one-to-one by the US dollar.
It only holds the best liquid assets, such as US dollar deposits, short-duration US treasuries, and cash equivalents.
Charles “Chad” Cascarilla, co-founder and CEO of Paxos International as well as a member of the board of directors said that users of USDL can obtain “really the risk-free” return.
According to Cascarilla, Paxos International is a “ring-fenced entity” that only issues the stablecoin. In the event that Paxos failed, the assets would not be subject to a bankruptcy procedure. They are given back to investors right away.
USDL made its debut in Argentina
Using cryptocurrency platforms Ripio, Buenbit, and TiendaCrypto as its distribution partners, Paxos International is introducing the USDL stablecoin for the first time in Argentina.
According to Ronak Daya, head of product at Paxos, users can presently receive a yield on USDL of roughly 5%, which is comparable to the current effective federal funds rate, or EFFR.
Rebasing is how Paxos International distributes yield, and according to Daya, users’ USDL holdings will rise everyday in tandem with the yield.
According to Daya, Paxos International will levy a distribution cost of 20 basis points and an issuer fee of 30 basis points. The company will then distribute the remaining yield to customers, with the exception of the issuer fee, which will not be charged during the initial USDL marketing period.
In the US and certain other jurisdictions, USDL is not available
Residents of some jurisdictions, such as the United States, the United Kingdom, the European Union, Canada, Hong Kong, Japan, and Singapore, are not eligible to use USDL, with the exception of the United Arab Emirates (ADGM).
Because the U.S. Securities and Exchange Commission would view a yield-bearing stablecoin as a security, according to Cascarilla, Paxos, the main company, does not give yield on any of its current stablecoin products, including pax dollar or USDP.
According to Cascarilla, stablecoins are really about assisting those who lack access to dollars and are underbanked for a variety of reasons. USDL plans to debut its stablecoins in this worldwide market.
Daya stated, “We think the stablecoin market will grow 20 times over the next five years, and we think we can take market share from current incumbents and capture a big chunk of the future growth.”
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
