Paxos Introduces USDL a YieldBearing Stablecoin Automatically Distributing Daily Earnings to Holders

Stablecoin issuer Paxos’s entity Paxos International, 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):
Paxos International mentioned that USDL is pegged 1:1 to the value of the US dollar and only holds “the highest quality liquid assets” such as US dollar deposits, short-term US treasuries, and cash equivalents, regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM).

Charles Cascarilla, board member of Paxos International and co-founder and CEO of Paxos, stated in an interview with The Block that with USDL, users can earn a “truly risk-free” return. He indicated that Paxos International is a “walled entity” and, apart from issuing the stablecoin, does not engage in any other activities. Cascarilla also pointed out that “if anything happens to Paxos, these assets will not be part of the bankruptcy process, they will be returned immediately to investors.”

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

USDL is not available to residents of the United States and several jurisdictions.
Paxos International is launching the stablecoin USDL in Argentina through distribution partners in the crypto platforms Ripio, Buenbit, and TiendaCrypto.

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

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