Paxos USDG Launches on Arbitrum with $3B Stablecoin Expansion
Paxos' Global Dollar (USDG) stablecoin launched on Arbitrum One on October 6, 2026, marking a significant expansion for the Ethereum layer-2 network. With over $3 billion in circulation, USDG is now part of the Global Dollar Network, which shares reserve rewards among its partners. Arbitrum does not take a direct cut of reserve income from existing stablecoins but will benefit from USDG's growth.
Arbitrum's stablecoin base is approximately $3.8 billion, with Circle's USDC dominating around 60% of the supply. To boost USDG adoption, an ArbitrumDAO governance proposal seeks 100 million ARB in incentives and treasury support. Kraken will manage deposits and withdrawals, while Stargate will facilitate USDG transfers between Arbitrum and other blockchains.
USDG is already integrated with platforms like Fluid, Morpho, GMX, Maple, Li.Fi, Gauntlet, Steakhouse, and LayerZero, with plans to add Uniswap and Fhenix. The Global Dollar Network, which includes partners like Robinhood, Kraken, Mastercard, and OKX, splits reserve rewards among its members. Arbitrum aims to leverage these rewards for adoption and ecosystem development, addressing the gap where USDC's reserve income does not flow directly to the network.
The governance proposal, published on October 3, 2026, seeks to make USDG growth a strategic priority, add ARB allocations to the DRIP incentive program, and deploy treasury assets to support USDG liquidity. However, moving USDG's supply from other chains like X Layer, Robinhood Chain, and Solana remains a challenge. Competitors such as Open Standard and Qivalis are also pursuing similar partnerships, spreading issuance and economics across multiple partners.
Standard Chartered recently forecasted that Arbitrum could receive 10% of net protocol revenue from companies building on its infrastructure, potentially driving the ARB token to $10 by 2030. The proposal's success hinges on the ArbitrumDAO vote, which will determine the future of USDG's role within the network.