Paxos International, a branch of Paxos headquartered in the UAE, has introduced a stablecoin called Lift dollar (USDL) that generates yield. Its initial market launch is in Argentina.
Paxos International said Wednesday:
USDL is issued permissionlessly on Ethereum and pays yield programmatically on a daily basis to token holders, subject to the reserve assets fully backing the total value of USDL in circulation
Paxos International emphasizes that USDL is backed one-to-one with the U.S. dollar and consists solely of high-quality liquid assets like U.S. dollar deposits, short-duration U.S. treasuries, and cash equivalents. Regulated by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), USDL offers users a risk-free return, according to Charles “Chad” Cascarilla, a board member of Paxos International and co-founder/CEO of Paxos. He clarified that Paxos International is exclusively focused on issuing the stablecoin, ensuring that in the event of any issues with Paxos, the assets backing USDL are immediately returned to investors rather than becoming part of any bankruptcy proceedings.
Paxos International is debuting the USDL stablecoin in Argentina through crypto platforms Ripio, Buenbit, and TiendaCrypto as distribution partners. Users can currently earn a 5% yield on USDL, close to the effective federal funds rate, using a rebasing technique. Paxos International will apply a 20 basis points distribution fee and a 30 basis points issuer fee, with the remaining yield going to users. However, USDL is not available in the U.S. and several other jurisdictions due to regulatory considerations, as yield-bearing stablecoins may be considered securities by entities like the U.S. Securities and Exchange Commission.
