Arbitrum has joined the Global Dollar Network, the Paxos-led stablecoin consortium behind USDG, bringing the dollar token to the Ethereum layer-2 as the network looks for a bigger role in the economics of stablecoin usage on its platform.

The launch comes with a governance push inside Arbitrum. A proposal published Tuesday asks ArbitrumDAO to treat USDG expansion as a strategic priority, increase the network’s DRIP incentive program by 100 million ARB, and deploy treasury assets to help build liquidity for the stablecoin.

USDG launches on Arbitrum

USDG is now live on Arbitrum with integrations across trading, lending and payments. The initial lineup includes Fluid, Morpho, GMX, Maple, Li.Fi, Gauntlet, Steakhouse, LayerZero and Kraken, while Uniswap and Fhenix are expected to follow.

The token is issued by Paxos and is backed one-for-one by dollar reserves. According to the source article, USDG has more than $3 billion in circulation across networks.

Why Arbitrum is joining the consortium

Global Dollar Network has more than 150 partners, including Robinhood, Kraken, Mastercard and OKX. Its structure is designed to share rewards generated by USDG reserves with partners that help drive adoption, instead of keeping those economics only with the issuer.

That approach is significant for Arbitrum because large amounts of stablecoin activity already take place on the network without giving it a direct claim on reserve income. The article says Arbitrum currently hosts about $3.8 billion in stablecoins, with Circle’s USDC making up roughly 60% of that total.

Brendan Ma, head of investment strategy at the Arbitrum Foundation, said the addition of USDG gives Arbitrum and builders on the network a stake in the upside from future growth.

DAO proposal targets incentives and liquidity

The proposal now before ArbitrumDAO would formalize that strategy. In addition to naming USDG growth as a priority, it calls for 100 million ARB to be added to the DRIP incentive program and for treasury assets to be used to support liquidity around the stablecoin.

If approved, those measures would give the network a more direct way to encourage adoption of USDG across Arbitrum-based applications and markets. The proposal does not change the fact that the plan remains subject to DAO governance.

Part of a broader stablecoin trend

Arbitrum’s move reflects a wider shift in the stablecoin market, where alliances are being built to spread issuance, distribution and the financial benefits of adoption across a broader set of participants.

Rather than concentrating control and reserve economics in a single company, these consortium models aim to align networks, platforms and service providers around growth. For Arbitrum, the next confirmed step is the DAO’s consideration of the Tuesday proposal as USDG integrations continue to roll out on the network.

Source: www.coindesk.com