Paxos Introduces USDL a ProfitGenerating Stablecoin with Daily Automatic Yield Distribution

Paxos International, a subsidiary of stablecoin issuer Paxos based in the United Arab Emirates, has launched a yield-bearing stablecoin called “Lift dollar” (USDL) and has chosen Argentina as its first market.

Paxos International stated on Wednesday (5th) that USDL is pegged to the value of the US dollar at a 1:1 ratio and holds only “the highest quality liquid assets” such as US dollar deposits, short-term US Treasury bonds, and cash equivalents, regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).

Charles Cascarilla, a board member of Paxos International, co-founder, and CEO of Paxos, stated in an interview with The Block that users can earn “truly risk-free” returns with USDL. He mentioned that Paxos International is a “walled entity” and does nothing other than issuing the stablecoin. Cascarilla also emphasized that if anything were to happen to Paxos, these assets would not be part of the bankruptcy process and would be immediately returned to investors.

Ronak Daya, the product lead at Paxos, stated in an interview that users can currently earn approximately 5% returns on USDL, which is close to the current Effective Federal Funds Rate (EFFR). Paxos International utilizes Rebasing technology to distribute the returns, and Daya mentioned that users’ USDL holdings will increase daily along with the returns. Additionally, Daya stated that Paxos International will charge a 0.2% distribution fee and a 0.3% issuance fee and distribute the remaining returns to users.

USDL is not available to residents in the United States and several jurisdictions.

Paxos International is partnering with crypto platforms Ripio, Buenbit, and TiendaCrypto as its distribution partners and is launching the USDL stablecoin in Argentina initially.

USDL is not available to residents in certain jurisdictions, including the United States, the UAE (excluding the Abu Dhabi Global Market), the United Kingdom, the European Union, Canada, Hong Kong, Japan, and Singapore. Cascarilla stated that the U.S. Securities and Exchange Commission (SEC) may consider yield-bearing stablecoins as securities, which is also the reason why Paxos, the main entity, does not offer returns on its existing stablecoin products such as USDP.

Cascarilla mentioned that stablecoins are essentially designed to help individuals who do not have bank accounts, lack banking services, or for various reasons cannot access US dollars, and he pointed out that USDL will target such populations globally in future releases. Daya added:

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