Paxos launches a “crypto dollar” in Argentina that offers returns

A new stablecoin arrives in Argentina and the global market: Lift Dollar (USDL). It is a token that maintains the same price as the US dollar, which is informally known as the “crypto dollar” or “digital dollar.”

The company issuing the crypto asset is Paxos, which announced today the launch at a press conference in the City of Buenos Aires, Argentina, in which CriptoNoticias was present.

USDL is the third dollar-pegged stablecoin currently managed by Paxos, following Pax Dollar (USDP) in 2018 and PayPal USD (PYUSD) in 2023.

Unlike such stablecoins, USDL offers its users daily returns thanks to its exposure to US Treasuries (currently 5% annually). However, it should be noted that if interest rates fall later in the year as expected, yields will also decline.

From Paxos, they explained that with USDL what they are looking for is that users can obtain returns on bonds through a stablecoin, something that is normally what the issuing companies keep to make profits. In this way, they indicated that they limited their exposure of benefits to share them with the final consumer.

“It’s what’s coming; the industry is going towards that,” commented Andy Werner, director of Paxos, pointing out that they wanted to be the first to provide a stablecoin of this type. They understand that users will increasingly look for better conditions when using crypto assets, which led them to create this new asset.

USDL is developed on the Ethereum network, not its own network, which makes it a token, not a cryptocurrency. Its backing is made up of dollars in cash, Treasury bills (t-bills), and repurchase agreements (overnight repos).

Where can you get the USDL stablecoin?

The stablecoin can be traded starting today through four cryptoasset exchanges in Argentina. These are Ripio, Buenbit, Plus Crypto and Manteca. Although Paxos told CriptoNoticias that the plan is to also make it available soon for other platforms both inside and outside the country.

The strong use of crypto assets in Argentina is what motivated Paxos to launch its new stablecoin in this country, beyond its expectations of global adoption. Furthermore, they found it necessary to offer the product in this place first due to the attraction that Argentines have for saving in dollars and particularly in “crypto dollars.”

They maintain that economic difficulties and restrictions on accessing the US currency promote this scenario. Although they hope that, even with an opening of the exchange rate, the adoption of cryptoassets such as stablecoins, also called stablecoins, will continue to flourish if regulation supports.

“Stable cryptocurrencies with returns are the future of this type of cryptocurrency, since they share the income generated with end users,” commented Federico Ogue, CEO of Buenbit. Like Paxos, he considered that this could be the path that other issuing companies also take later.

Competition between stablecoins increases

Currently, the stablecoins with the highest market capitalization are Tether (USDT) and USD Coin (USDC). Meanwhile, those of Paxos, PYUSD and USDP, are in 7th and 13th place respectively of this niche, while they are at 176th and 385th of all crypto assets, as seen below.

PYUSD was launched in association with PayPal, one of the largest global payment platforms, which made it position itself among the main stablecoins in its short time on the market. Therefore, it is a challenge for USDL to compete against this asset, as well as the rest of those available.

In a market where so many stablecoins compete, Paxos indicated that each of theirs seeks to serve a different audience. The launch of USDL is added as an alternative for those seeking exposure to US Treasury bonds.