Paxos USDL Stablecoin Offering 5% APY Launched

Key Points:

• Paxos introduces Lift Dollar (USDL), a stablecoin offering a 5% daily yield through its UAE-based entity.
• Paxos USDL stablecoin, built on Ethereum and backed by U.S. dollars and Treasury notes, is regulated by Abu Dhabi’s Financial Services Regulatory Authority.
• USDL launches first in Argentina via crypto platforms Ripio, Buenbit, and TiendaCrypto.

Paxos, a prominent player in the stablecoin market, has launched a new stablecoin named Lift Dollar (USDL) through its UAE-based subsidiary, Paxos International.

Paxos USDL Stablecoin Secured and Regulated by Abu Dhabi Authority

The Paxos USDL stablecoin, pegged to the US dollar, offers a programmatic daily yield of approximately 5%, aligning with returns on US Treasury bonds.

Announced on Wednesday, the USDL is regulated by Abu Dhabi’s Financial Services Regulatory Authority, ensuring stringent oversight. Paxos CEO Charles Cascarilla emphasized that the structure of USDL mirrors that of Paxos’s other stablecoins, including PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). Each of these stablecoins is matched 1:1 with the dollar and backed by short-term U.S. government securities, safeguarding assets against potential bankruptcy scenarios.

USDL is built on the Ethereum blockchain, facilitating unrestricted creation and providing daily payouts to token holders. Each USDL token is fully collateralized by the U.S. dollar and secured by cash assets, including U.S. dollar deposits and short-term U.S. Treasury notes. This structure is intended to maintain sufficient reserves to support the total USDL in circulation, thereby reinforcing investor confidence.

Cascarilla highlighted the strategic decision to introduce Paxos USDL stablecoin in jurisdictions with clear regulatory frameworks. In the US, a stablecoin with a pre-programmed yield could be classified as a security by regulators. This approach aims to ensure compliance with diverse rules and regulations globally.

Initial USDL Launch in Argentina via Crypto Platforms

Initially, Paxos International is launching USDL in Argentina through partnerships with crypto platforms Ripio, Buenbit, and TiendaCrypto. This strategic entry point leverages these platforms’ extensive user bases to facilitate adoption.

The move comes after Paxos Trust Company, regulated by the New York Department of Financial Services, ceased offering BUSD, a stablecoin linked to Binance, under regulatory directives last year.