Arbitrum has joined the Global Dollar Network, the Paxos-led stablecoin consortium behind USDG, as the Ethereum layer-2 network moves to capture part of the economics tied to stablecoin activity already taking place on its rails.
USDG went live on Arbitrum on Tuesday with integrations across trading, lending and payments. The rollout includes Fluid, Morpho, GMX, Maple, Li.Fi, Gauntlet, Steakhouse, LayerZero and Kraken. Uniswap and Fhenix are set to follow. Kraken is also providing on- and off-ramps.
Issued by Paxos, USDG is backed one-for-one by dollar reserves and has more than $3 billion in circulation across networks. The Global Dollar Network has more than 150 partners, including Robinhood, Kraken, Mastercard and OKX.
Reserve income is central to the pitch
The network’s model distributes rewards generated by USDG reserves among partners that help drive adoption, rather than leaving those economics solely with the issuer. For Arbitrum, that creates a new way to earn from stablecoin activity on the network.
DefiLlama data shows Arbitrum currently holds about $3.8 billion in stablecoins, with roughly 60% of that total in Circle’s USDC. Arbitrum does not directly receive a share of the reserve income generated by those tokens.
Brendan Ma, head of investment strategy at the Arbitrum Foundation, said, “With USDG, Arbitrum and builders across the platform now have a stake in the growth upside.”
Governance proposal targets USDG growth
A governance proposal published Tuesday asks ArbitrumDAO to make USDG growth a strategic priority, add 100 million ARB to its DRIP incentive program and use treasury assets to support USDG liquidity.
Stablecoin alliances are expanding
Arbitrum’s move comes as stablecoin consortiums take on a larger role in the competition around digital dollars. Open Standard is building around OpenUSD, with backing from Mastercard, Visa, Stripe, Coinbase and Shopify. In Europe, Qivalis is backed by 37 banks.
The broader idea is to spread issuance, distribution and economics across a wider partner network instead of leaving control with a single company.
Arbitrum has drawn fresh attention elsewhere
Arbitrum has also picked up recent attention beyond stablecoins. Its technology underpins Robinhood Chain, the brokerage’s planned Ethereum-based network, and Robinhood has agreed to share a portion of revenue generated by user activity with the Arbitrum ecosystem.