- Arbitrum has joined Paxos’s Global Dollar Network and launched USDG natively on Arbitrum One.
- A governance proposal asks ArbitrumDAO to make USDG growth a strategic objective, add 100 million ARB to the DRIP incentive program and deploy treasury assets to support liquidity.
Arbitrum is trying to turn one of the largest stablecoin pools among Ethereum Layer 2 networks into a source of direct ecosystem economics.
The blockchain has joined Paxos’s Global Dollar Network, bringing Global Dollar, or USDG, natively to Arbitrum One. As a network partner, Arbitrum will participate in USDG’s economics, with rewards generated through adoption on Arbitrum directed back into the ecosystem.
The move matters because Arbitrum already hosts $3.78 billion in stablecoins. USDC controls 61.4% of that supply, with more than $2.3 billion circulating on the network, according to DefiLlama data.
Until now, Arbitrum benefited from the trading, lending and transactions that stablecoins generate, including network fees. But it did not directly participate in the reserve economics generated by the dominant stablecoins held on the network.
“With its industry-leading technology and one of the most vibrant DeFi ecosystems in crypto, Arbitrum consistently drives massive demand for and transaction volume in US dollar-denominated stablecoins,” Steven Goldfeder, CEO and co-founder of Offchain, said in a statement shared with AlexaBlockchain. “For too long, though, none of that activity has happened in a dollar aligned with the ecosystem creating it.”
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Stablecoin Reserves Have Become Big Business
The economics behind the decision are significant.
Dollar-backed stablecoin issuers can earn income by investing reserves in cash, Treasury bills and other short-duration assets. Circle generated $668 million of reserve income in the Q2 2026 from assets backing USDC, while distribution, transaction and other costs reached $412 million.
Global Dollar Network is designed to distribute more of those economics to companies and platforms that help USDG grow.
USDG reserves are held in Treasury bills, money-market funds and cash or cash equivalents. Global Dollar Network partners can receive up to 100% of the reserve rewards generated by USDG balances on their platforms, alongside incentives tied to minting and usage.
The network had passed 150 partners and $3 billion in USDG circulation by July, and said it had distributed tens of millions of dollars in rewards to members. Partners include Kraken, OKX, Robinhood and other financial and crypto companies.
“There is about $4 billion of stablecoins held on Arbitrum. Until today, the ecosystem has not directly shared in the growth and economics of this asset class,” Brendan Ma, head of investment strategy at the Arbitrum Foundation, said.
“Over time, growth in stablecoin supply will become growth that the ecosystem participates in directly.”
Arbitrum Is Building Distribution Around USDG
Arbitrum is pairing the economic model with integrations intended to give USDG utility from launch.
USDG will trade through Fluid and can be deployed into Morpho vaults curated by Steakhouse and Gauntlet. Maple supports syrupUSDG, while GMX is building a dedicated USDG liquidity line with USDG as the sole stablecoin in its flagship GLV(USDG) vault.
Kraken will provide on- and off-ramps for USDG on Arbitrum, while Stargate will provide transfers between Arbitrum and other networks. Uniswap and Fhenix are among the integrations expected to follow.
The strategy could also receive substantial token incentives.
A governance proposal is asking ArbitrumDAO to make USDG growth a strategic objective, add 100 million ARB to the DRIP incentive program and deploy treasury assets to strengthen USDG liquidity. The proposal still requires governance approval.
Arbitrum has previously shown that targeted incentives can materially shift liquidity. Its first DRIP season deployed 14.6 million ARB, while dollar-denominated lending markets grew 38% to around $770 million and yield-bearing stablecoin supply increased from $130 million to more than $1 billion.
USDG Faces Much Larger Rivals
USDG is growing, but it remains far smaller than the dominant stablecoins.
The global stablecoin market currently stands at more than $307 billion. USDT accounts for $184.2 billion and USDC $74.3 billion, compared with $3.08 billion for USDG, according to DefiLlama.
The competitive battle, however, is increasingly moving beyond market capitalization and liquidity toward who receives the economics generated by stablecoin reserves.
Open USD, or OUSD, launched in September with backing from Coinbase, Mastercard, Shopify, Stripe and Visa. Businesses joining its Open Standard network can also earn rewards based on stablecoin activity, creating another distribution model that competes with traditional issuer-controlled economics.
USDG has already shown that this model can gain market share when a platform actively organizes its ecosystem around the stablecoin.
On OKX’s X Layer, USDG now represents more than 91% of the network’s $1.56 billion stablecoin supply. On Robinhood Chain, where USDG was the first natively issued stablecoin, it accounts for nearly 66% of the chain’s $1.08 billion stablecoin market.
Robinhood Chain also uses USDG in its onchain Earn product, providing an example of how a Global Dollar Network member can combine native issuance, distribution and financial products around the same stablecoin.
Arbitrum will be a tougher test.
Unlike a new blockchain where a preferred stablecoin can establish itself from launch, Arbitrum already has deep USDC and USDT liquidity, established trading pairs and mature DeFi markets. USDC alone represents more than 61% of its stablecoin supply.
The question is whether revenue sharing, liquidity incentives and coordinated integrations are enough to persuade protocols and users to shift meaningful balances toward USDG.
If they do, Arbitrum’s stablecoin base would become more than liquidity moving through the network. Part of the economics generated by those dollars would begin flowing back to the ecosystem hosting them.
Read Also: This is the First U.S.-Chartered Depository Bank to Offer Stablecoin Invoicing
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