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Paxos Tests Regulated Yield Stablecoin With USDGL in Singapore
Paxos's USDGL stablecoin pays yield under MAS rules, testing whether regulated structures can replace risky DeFi yield products after the UST collapse and regulatory crackdown.
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Paxos launched USDGL, a stablecoin issued under the Monetary Authority of Singapore's regulatory framework that delivers yield to holders from low-risk reserve investments, the company said.
The product lands after a stretch of turmoil for unregulated yield products. Terra's UST collapse in 2022 erased $40 billion. Celsius and BlockFi, which ran high-yield crypto deposit programs, filed for bankruptcy. Regulators worldwide toughened their approach. Singapore's MAS introduced a stablecoin framework in 2023 requiring issuers to hold reserves in cash or government bonds and publish monthly attestations. USDGL is one of the first yield-bearing stablecoins issued under that regime.
Paxos generates the yield by investing the reserve portfolio in short-term government securities or comparable instruments, according to company disclosures. The issuer already operates a regulated stablecoin, USDP, under New York Department of Financial Services oversight, with reserve audits and capital requirements. The Singapore framework adds separation of reserves and redemption guarantees.