$3B USDG Stablecoin Launches on Arbitrum — Proposal Would Allocate 100M ARB to Boost Adoption

Paxos has launched its Global Dollar (USDG) stablecoin on Arbitrum One. About $3.1 billion USDG is in circulation, and a proposal has appeared in ArbitrumDAO to make the stablecoin’s growth one of the ecosystem’s priorities and allocate up to 100 million ARB tokens to incentivize its use.

USDG is issued directly on Arbitrum rather than existing there only as an asset bridged in from elsewhere. Paxos documentation already lists the official contract for Arbitrum Mainnet.

Several major DeFi protocols support the new asset from the start. As Cointelegraph reports, integrations are planned for GMX, Morpho, Fluid and Maple. Kraken plans to support USDG deposits and withdrawals, while Stargate will handle transfers between Arbitrum and other networks.

No one has allocated the 100M ARB yet

There is an important caveat here: the 100 million ARB program is still a proposal for ArbitrumDAO, not an approved budget.

If the community approves it, the ARB is intended to incentivize liquidity and drive USDG adoption. The proposal also considers using part of Arbitrum’s treasury assets to support the stablecoin’s markets, and projects that integrate USDG could qualify for additional support from the Arbitrum Foundation.

At the same time, Arbitrum is joining the Global Dollar Network (GDN), a group of companies built around USDG. Its model differs from most stablecoins in that part of the revenue from reserves is distributed among partners that help drive use of the coin.

According to Global Dollar Network, the network already brought together more than 150 companies over the summer, and partners have been paid tens of millions of dollars in rewards. The revenue Arbitrum earns as a GDN member is to be returned to ecosystem development.

USDG is already among the largest stablecoins

USDG is backed by reserves in dollars, short-term US Treasuries, money market funds and other highly liquid assets. Paxos says it can be redeemed at 1 USDG = $1 and publishes monthly reserve attestations.

The main issuer is Paxos Digital Singapore, which holds a Major Payment Institution license and is supervised by the Monetary Authority of Singapore. In Europe, USDG is also issued by Paxos Issuance Europe under local regulation.

According to figures cited by Cointelegraph and attributed to DefiLlama, about $3.09 billion USDG is in circulation, making it roughly the seventh-largest stablecoin. A significant share of the supply is concentrated on X Layer, Robinhood Chain and Solana.

For Arbitrum, the USDG launch means another major dollar asset in an ecosystem that already holds about $4 billion in stablecoins. But how far the push goes will depend above all on the DAO’s decision: the 100 million ARB remains a potential incentive, not approved spending.