Ship or Die at Accelerate 2025: Fireside Chat: USDG (Sergio Mello, Walter Hessert, Jack Kubinec)

The stablecoin landscape is on the brink of a seismic shift as industry leaders unveil the Global Dollar Network, a groundbreaking alliance set to revolutionize the economics and adoption of stablecoins. In a revealing fireside chat at Accelerate 2025, key figures behind the USDG stablecoin discuss how this new model could reshape the future of digital dollars and bring trillions in institutional capital on-chain.

Summary

The Global Dollar Network represents a paradigm shift in the stablecoin ecosystem, moving away from the centralized models of USDC and USDT towards an open network of partners who share in the economic benefits of stablecoin growth. USDG, a regulated US dollar-backed stablecoin, sits at the heart of this network, offering a unique value proposition to both institutional players and end-users.

This new model comes at a crucial time, as regulatory clarity in the US and other jurisdictions is paving the way for increased institutional adoption of stablecoins. The Global Dollar Network aims to capitalize on this trend by providing a seamless way for large institutions to enter the stablecoin space without the complexities of issuing their own digital assets.

The discussion highlights the challenges faced by new stablecoins in gaining market share from established players like USDC and USDT. However, the speakers argue that by offering superior economics and a more collaborative approach, the Global Dollar Network can overcome these hurdles and drive significant adoption.

As traditional financial institutions and tech giants explore stablecoin issuance, the conversation touches on the long-term outlook for the sector. The speakers predict a consolidation of issuance to a few key players, with the vast majority of economic benefits flowing to network participants who drive utility and adoption.

Key Points:

The Global Dollar Network Explained

The Global Dollar Network is an open alliance of partners using, distributing, and holding USDG, a regulated US dollar-backed stablecoin. Unlike traditional stablecoin models where the issuer retains most of the economic benefits, the Global Dollar Network shares over 95% of the economics with its network of partners. This innovative approach incentivizes partners to grow the network and adoption of USDG.

Participation in the network is open and flexible, with no strict requirements for members to exclusively use or promote USDG. Partners can range from small startups to large-scale tier one players in the crypto industry and global financial services. Some partners may choose to prioritize USDG on their platforms, while others may list it alongside existing stablecoins.

The Changing Stablecoin Landscape

The speakers emphasize that the stablecoin market is entering a new era, driven by regulatory clarity and increased institutional interest. This shift is expected to bring orders of magnitude more capital into the stablecoin ecosystem, as large institutions seek to bring billions or even trillions of dollars on-chain.

The Global Dollar Network is positioned to capitalize on this trend by offering a regulated environment that allows institutions to participate in the stablecoin market without the complexities of issuing their own digital assets. This approach addresses the challenges faced by companies like PayPal, which attempted to launch its own stablecoin but struggled with adoption and regulatory hurdles.

Driving User Adoption

The discussion acknowledges the difficulties new stablecoins face in attracting users and liquidity away from established players like USDC and USDT. While liquidity incentives and yield offerings can play a role in driving adoption, the speakers argue that the key to success lies in creating a better overall product.

By sharing economic benefits with distribution partners, USDG enables these partners to compete more effectively for end-users. This could lead to innovative models where the benefits are passed down to users in various forms, similar to how Coinbase shares yield with customers holding USDC on their platform.

The Future of Stablecoin Issuance

As traditional banks and tech companies explore stablecoin issuance, the speakers predict a consolidation in the market. They argue that the complexity and challenges of launching and maintaining a successful stablecoin will lead most institutions to prefer partnering with established issuers rather than creating their own.

Paxos, as an experienced stablecoin issuer, positions itself as a key player in this evolving landscape. The company's history of issuing regulated stablecoins, combined with the new Global Dollar Network model, positions it well to serve the needs of large institutions entering the space.

Facts + Figures

• The Global Dollar Network shares over 95% of stablecoin economics with network partners
• Paxos has issued approximately $150 billion of regulated US dollar stablecoins on a gross basis
• USDG is being adopted by a range of partners, from small startups to tier one players in the crypto and financial services industries
• The next phase of stablecoin adoption is expected to bring trillions of dollars of M2 money supply on-chain
• Traditional banks, including Bank of America and Citibank, are exploring launching a joint stablecoin
• The Genius Act, a proposed regulation for stablecoins, is moving forward in the US legislature
• PayPal launched its own stablecoin, PYUSD, in 2023 in partnership with Paxos
• Binance USD (BUSD), also issued by Paxos, was approaching the market cap of USDC and USDT before regulatory intervention
• The majority of USDC is held on Coinbase, which shares yield benefits with users

Top quotes

1. "We're switching from a first era of stablecoins to a second era of stablecoins, where the dynamics no longer depend simply on some native DeFi and pure crypto growth." - Sergio Mello

2. "The next phase of stablecoins is about enabling the enterprise, the institutions that come on chain that bring those trillions of dollars of M2 money supply on chain." - Sergio Mello

3. "The way to compete, we believe, is to make a better product. And we think a better product is sharing the economics." - Walter Hessert

4. "The battle on the hill is real and has been going on for months and we're not finished. We're not done, but we're very close to the ending strokes." - Sergio Mello

5. "I think you'll see the issuance get consolidated to a few players when you think about global stablecoins." - Walter Hessert

Questions Answered

What is the Global Dollar Network?

The Global Dollar Network is an open alliance of partners using, distributing, and holding USDG, a regulated US dollar-backed stablecoin. It represents a new model for stablecoin ecosystems, where over 95% of the economic benefits are shared with network participants. This approach incentivizes partners to grow the network and drive adoption of USDG, creating a more collaborative and potentially more successful stablecoin ecosystem.

How does USDG differ from other stablecoins like USDC and USDT?

USDG differentiates itself by offering a more collaborative economic model. While traditional stablecoins like USDC and USDT primarily benefit the issuer or a small group of partners, USDG shares the vast majority of its economics with network participants. This allows partners to potentially offer better incentives to end-users and creates a more distributed and potentially resilient ecosystem. Additionally, USDG is designed with institutional adoption in mind, aiming to facilitate the entry of large-scale financial players into the stablecoin space.

Why are institutions interested in joining the Global Dollar Network?

Institutions are drawn to the Global Dollar Network for several reasons. Firstly, it offers a way to participate in the growing stablecoin market without the complexities and costs of issuing their own digital asset. Secondly, the network's economic sharing model allows institutions to benefit from stablecoin growth in ways that aren't possible with existing stablecoins. Lastly, as regulatory clarity improves, many institutions see stablecoins as a crucial part of future financial infrastructure, and the Global Dollar Network provides a regulated, collaborative approach to entering this space.

How does the changing regulatory landscape impact stablecoin adoption?

The evolving regulatory landscape, particularly in the US with the proposed Genius Act, is creating more clarity and confidence for institutions looking to adopt stablecoins. This regulatory progress is expected to unlock significant institutional capital, potentially bringing trillions of dollars on-chain. The Global Dollar Network is positioned to capitalize on this trend by offering a regulated stablecoin solution that meets the needs of large financial institutions while also providing the benefits of blockchain technology.

What is the long-term outlook for stablecoin issuance?

The speakers predict a consolidation in stablecoin issuance, with a few key players emerging as dominant issuers. They argue that the complexities of maintaining a successful stablecoin, including holding the peg, building liquidity, and growing an ecosystem, will lead most institutions to prefer partnering with established issuers rather than creating their own stablecoins. In this scenario, the economic benefits of stablecoins would be widely distributed among network participants who drive utility and adoption, rather than being concentrated with the issuer.