Paxos International issues an interest-bearing stablecoin called Lift Dollar (USDL).
Paxos International issues an interest-bearing stablecoin called Lift Dollar (USDL). USDL will be regulated on the Abu Dhabi Global Market (ADGM) and pay an overnight yield on the interest Paxos International earns on its collateral reserves.
USDL will be backed 1:1 by liquid U.S. government securities and cash reserve assets held in accordance with the requirements of the ADGM Financial Services Regulatory Authority. Instead of earning interest on these reserves, Paxos International will charge a token issuer fee.
Paxos separately announced that USDL would be available in Argentina through resellers Ripio, Buenbit, Manteca and Plus Crypto.
Paxos claims USDL is first of its kind
The Ethereum smart contract will use a mechanism called rebase to automatically distribute USDL yield based on market conditions. According to Bloomberg, the yield would reach around 5%. Paxos International said in a statement that USDL is the first regulated, interest-bearing stablecoin. In general, stablecoin holders can also earn interest through staking, reallocation, and farming income.
Related: UAE Central Bank approves licensing system for stablecoins
USDL will not be available to residents of the US, UAE outside of ADGM, UK, EU, Canada, Hong Kong, Japan or Singapore. Paxos International explained:
“The digital assets referenced herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States except pursuant to ‘an applicable registration exemption.”
New York-based Paxos creates PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG) under regulation by the New York Department of Financial Services (NYDFS). He also mined Binance USD (BUSD) until the NYDFS and the US Securities and Exchange Commission threatened to take action against him for issuing an unregistered security.
Abu Dhabi Global Market Growing Rapidly
ADGM is a free economic zone within Abu Dhabi that was established in 2013. The market published comprehensive regulations for distributed edge technology (DLT) in November and partnered with Solana to develop DLT technology in FEBRUARY.
Since then, Chainalysis and BlockDamon have set up offices there. Digital asset companies such as Rain, M2, Laser Digital, Binance FZE and QCE Capital last year obtained licenses to offer their services in the Abu Dhabi global market.
Magazine: SEC sues Do Kwon, Paxos prepares to sue, SBF VPN: Hodler’s Digest, February 12-18
