Paxos International is launching a stablecoin named the Lift Dollar (USDL) that will accrue interest. The USDL will be overseen by the Abu Dhabi Global Market (ADGM) and distribute overnight yield based on the interest earned by Paxos International from the reserves supporting it.
The USDL will be supported by liquid U.S. government securities and cash equivalent reserve assets held in compliance with the ADGM’s Financial Services Regulatory Authority regulations on a 1:1 basis. Instead of accruing interest on these reserves, Paxos International will impose an issuer fee for the token.
Paxos has revealed that the USDL will now be accessible in Argentina through distributors Ripio, Buenbit, Manteca, and Plus Crypto. An Ethereum smart contract will utilize a rebasing mechanism to automatically distribute yield on the USDL according to market conditions. Bloomberg reports that the yield is expected to reach approximately 5%. Paxos International's statement highlights that the USDL is the initial interest-bearing, regulated stablecoin. Typically, holders of stablecoins can also earn interest by engaging in staking, restaking, and yield farming.
Residents of the United States, the United Arab Emirates outside the ADGM, the United Kingdom, the European Union, Canada, Hong Kong, Japan, or Singapore will not have access to USDL. This was clarified by Paxos International:
“The digital assets referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended and may not be offered or sold in the US, except pursuant to an applicable exemption from registration.”
Paxos, headquartered in New York, issues PayPal USD, PYUSD, Pax Dollar (USDP), and Pax Gold (PAXG) under the supervision of the New York Department of Financial Services (NYDFS). It previously issued Binance USD (BUSD) until facing warnings from the NYDFS and the United States Securities and Exchange Commission for distributing an unregistered security.