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

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

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

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

Ronak Daya, Product Manager at Paxos, stated in an interview that users can currently earn approximately 5% yield on USDL, which is close to the current effective federal funds rate (EFFR). Paxos International uses Rebasing technology to distribute the yield, and Daya mentioned that users’ USDL holdings will increase daily with the yield. Additionally, Daya stated that Paxos International will charge a 0.2% distribution fee and a 0.3% issuance fee, and the remaining yield will be paid to users.

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

Paxos International is launching USDL stablecoin in Argentina through distribution partners Ripio, Buenbit, and TiendaCrypto.

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

Cascarilla stated that stablecoins are essentially meant to help individuals who do not have a bank account, lack banking services, or cannot access the US dollar for various reasons. He also indicated that USDL will target such communities globally in future releases.

Source: