USDG Risk Assessment for Stabilizer
Asset: Global Dollar (USDG)
Issuer: Paxos Digital Singapore Pte. Ltd. (MAS-regulated Major Payments Institution) Deployments: Ethereum and Arbitrum
Contracts: Arbitrum 0x004B506865409877C9fA29bfb1ebA929984B9bbC · Ethereum 0xe343167631d89B6Ffc58B88d6b7fB0228795491D
Assessment date: October 2026
Overall risk level: 
LOW RISK
Pathway: Testnet first, then mainnet with pool capacity sized per chain
Summary
USDG meets the standard we have applied to USDT, USDT0, USDC, USDS, and PYUSD. The issuer is Paxos, reserves are held in government money market funds and short-dated Treasuries, attestations are monthly reasonable-assurance examinations by KPMG, and the contracts have been audited by Zellic, Trail of Bits and Halborn under an MIT licence.
Two points distinguish it from our existing assets. The regulator is the Monetary Authority of Singapore rather than NYDFS, through a different Paxos entity. And USDG is younger, launched November 2024, with its liquidity distributed across multiple chains.
Part 1: Preliminary Screening
Part 1: Preliminary Screening
| Criterion | Status | Source |
|---|---|---|
| Audited smart contract |  PASS |
Zellic, Trail of Bits and Halborn, including a USDG-specific rewards audit. audits folder |
| Open-source and verified | PASS |
MIT licensed, usdg-contract. Verified on Arbiscan with exact match |
| Operational history | PASS |
Launched November 2024, approximately 2 years |
| Market significance | PASS |
Market cap ~$3.08B, DefiLlama |
| Trading activity | PASS |
Listed on Kraken, Bullish, OKX and other GDN partner venues |
| Price oracle available | PASS |
Chainlink USDG/USD data stream available on both chains |
| Regulatory compliance | PASS |
MAS (Singapore) Major Payments Institution. Paxos Issuance Europe under FIN FSA, MiCA compliant |
| Peg resilience | PASS |
Trading at $1.00. See Category 1 for history |
Result: Screening passed, with the oracle question to resolve before mainnet. Proceed to Part 2.
Part 2: Risk Assessment Categories
Category 1: Peg Stability
| Current price | $1.00 |
| Operational history | ~23 months since November 2024 |
| Reserve coverage | 100.29% as at 31 August 2026 (KPMG reasonable assurance report, 25 September 2026) |
USDG has traded at or near par through its operating life. Independent analysis notes one significant early dislocation shortly after launch, plus brief episodes since.
Recorded price extremes
We are disclosing these rather than leaving them to be found, because they look alarming out of context.
| Source | All-time low | All-time high |
|---|---|---|
| CoinMarketCap | $0.6167, 7 December 2024 | $1.60, 11 November 2024 |
| CoinGecko | $0.9076 | $1.65 |
Both ranges fall entirely within USDG’s first weeks after its November 2024 launch. Two observations:
- A fully reserved stablecoin recording $0.62 and $1.60 within a month of each other is a thin-venue pricing artifact, not a reserve event. Redemption at par through Paxos was available throughout.
- The two aggregators disagree by roughly 30 percentage points on the same metric, which is itself evidence of how little liquidity existed to price against at the time.
Since liquidity established, USDG has held par. It trades at $0.9999 today on roughly $429M of daily volume.
Why this matters for our configuration. This is a direct illustration of the point made in Part 3: a price read from a thin venue is not a reliable depeg signal. A monitoring system that had been watching USDG in December 2024 and acting on a single venue would have set a 38% emergency fee against an asset that was fully redeemable at par. It is the reason we weight CEX order books over thin DEX pools for this asset and require confirmation across venue types before the fee moves.
Rating: LOW RISK
Category 2: Liquidity and Concentration
Overall activity
| Market cap | ~$3.08B |
| Growth | ~340% over the past year |
| Venues | Kraken, OKX, Bullish and other Global Dollar Network partner exchanges |
Chain distribution (DeFiLlama)
| Chain | Supply | Share |
|---|---|---|
| X Layer | 1.424B | ~46% |
| Robinhood Chain | 718M | ~23% |
| Solana | 619M | ~20% |
| Ethereum | 257M | ~8% |
| Ink | 63M | ~2% |
| Arbitrum | 31M | ~1% |
Supply is concentrated on X Layer, which is where redemption pressure would most likely originate in a stress event. For Stabilizer this matters less than it would for a lending protocol: our pools are isolated per asset and our deployments are isolated per chain, so exposure is to USDG on the chain we hold it, not to USDG globally.
USDG went live on Arbitrum on 6 October 2026, with Fluid, Morpho, GMX and Maple integrated at launch and Arbitrum joining the Global Dollar Network. ARB incentives have been allocated to boost adoption by Arbitrum on its network.
Rating: LOW RISK as an asset
Category 3: Smart Contract Risk
Audits. Three firms have reviewed the Paxos token contracts: Zellic, Trail of Bits and Halborn. Reports are published in the paxos-token-contracts audits folder.
| Report | Firm | Covers |
|---|---|---|
| Paxos Stablecoin | Zellic | Core stablecoin contracts |
| Paxos Cross Chain Integration | Trail of Bits | Cross-chain deployment |
| Paxos Token Contracts | Halborn | Token contract suite |
| Paxos USDG Rewards | Zellic | USDG on-chain rewards mechanism |
| Enhance Signature Validation | Zellic | Signature validation patch |
| Domain Separator | Halborn | Domain separator patch |
Other controls
| Repository | paxosglobal/usdg-contract, MIT licence |
| Bug bounty | Paxos $1M programme via Cantina, covering PYUSD, PAXG and USDG |
| Architecture | UUPS upgradeable proxy (ERC1967) |
| Arbitrum contract | 0x004B5068…84B9bbC, implementation 0x031610E2d186D78D3DeFbF907F56D1eac843d9De |
Two issuer powers to disclose
Upgradeability. The USDG token contract is upgradeable by Paxos. The token’s behaviour can change without any action by holders or by integrating protocols. This is standard for regulated stablecoins and is also true of PYUSD and USDC.
Freeze and seizure. Paxos retains the ability to freeze, seize and destroy USDG balances. A Stabilizer pool holding USDG is subject to that authority in the same way any other holder is.
Rating: LOW RISK
Category 4: Issuer Risk
| Item | Detail |
|---|---|
| Issuers | Paxos Digital Singapore Pte. Ltd. (PDS) and Paxos Issuance Europe Oy (PIE) |
| PDS regulator | Monetary Authority of Singapore. Major Payment Institution licence granted 1 July 2024 |
| PIE regulator | Finnish Financial Supervisory Authority. E-money institution licence 23 November 2022. MiCA e-money token compliant |
| Attestations | Monthly. KPMG LLP Singapore, independent reasonable assurance, under Singapore Standard on Assurance Engagements 3000 |
| Reporting criteria | AICPA 2025 Criteria for Stablecoin Reporting, Part I |
| Latest report | 6 August and 31 August 2026, signed 25 September 2026, Accessible from: Paxos | Global Dollar (USDG) Transparency Reports |
| Redemption | 1:1 at par through PDS and PIE for KYC-verified users |
Reserve composition (attested, Exhibit B)
| Asset | 31 Aug 2026 | Share | 6 Aug 2026 | Share |
|---|---|---|---|---|
| Government money market funds, at NAV | $1,719,123,533 | 51.31% | $2,006,070,172 | 57.83% |
| US Treasury obligations, at fair value | $1,544,391,014 | 46.09% | $1,353,998,185 | 39.03% |
| Cash at commercial banks | $86,947,920 | 2.60% | $108,735,021 | 3.13% |
| Repurchase agreements | $0 | 0% | $0 | 0% |
| Total redemption assets | $3,350,462,467 | $3,468,803,378 | ||
| Tokens outstanding | 3,340,650,602 | 3,463,715,853 | ||
| Excess over par | 0.29% | 0.15% |
What the reserves actually contain
| Treasury maturities | Three months or less, without exception, held at a qualified custodian |
| Repo | None held at either report date |
| Cash, PDS | $78,726,525, segregated stablecoin reserve account, MAS-regulated, Singapore |
| Cash, PIE | $8,721,395, segregated stablecoin reserve account, CSSF-regulated, Luxembourg |
Reserve asset restrictions. Under the Letter of Undertaking executed with MAS, Paxos may hold reserves only in cash, cash equivalents, bonds or notes with no more than three months residual maturity issued by the government of the pegged currency or a recognised multilateral agency, or such instruments under overnight reverse repurchase agreements with a counterparty rated at least AA- by Fitch or S&P, or Aa3 by Moody’s.
This is a binding regulatory constraint on reserve composition and the single strongest feature of USDG’s issuer profile.
Three disclosures for completeness
Cash deposits are uninsured. The report states plainly that the $86.9M of demand deposits at commercial banks is uninsured. It is 2.6% of reserves and the smallest component, but it is the portion exposed to bank credit risk rather than government credit risk.
Treasury counterparties are anonymised. The attestation lists Treasury holdings by CUSIP, maturity, par, cost and fair value, but names counterparties only as “Bank 1 in Singapore” and “Bank 2 in Singapore”. Individual custodians are not publicly identified.
The report carries a use restriction. KPMG states it is prepared solely to assist Paxos in its submission to MAS and may not be suitable for another purpose. This is standard language on a regulatory attestation and does not reduce the assurance obtained, but it is worth noting that we are reading a document prepared for a regulator rather than for integrators.
Comparison to PYUSD. Same issuer group, different regulated entity. PYUSD sits under NYDFS via Paxos Trust Company; USDG sits under MAS via Paxos Digital Singapore, with EU issuance through Paxos Issuance Europe under FIN-FSA. Reserve quality is comparable. The attestation standard is stronger: independent reasonable assurance under Singapore Standard on Assurance Engagements 3000, which is a higher bar than the limited-assurance and agreed-upon-procedures reports common in this market.
Rating: VERY LOW RISK
Category 5: External Validation
| Source | Rating |
|---|---|
| Pharos | B, 72/100, safe tier |
| Bluechip | Not currently rated |
| Global Dollar Network | 150+ partners including Kraken, Robinhood, Galaxy Digital, Anchorage Digital, Mastercard, Worldpay, OKX |
Rating: LOW RISK
Part 3: Emergency Depeg Fee Protection
Monitoring requirement
Stabilizer’s depeg protection reads prices across CEX order books, DEX pools and Chainlink feeds. Two items to resolve for USDG.
Chainlink. A USDG/USD CEX price stream is available through Chainlink Data Streams
Worth noting that this is a Data Stream rather than a push Data Feed, and that distinction matters for our design, as Data Streams aggregate at sub-second intervals and are pulled on demand
Because our monitoring runs off-chain, the stream is consumed off-chain and a single stream serves both the Ethereum and Arbitrum deployments. Chain-specific feed availability is not a constraint.
DEX depth for TWAP. A TWAP is only as reliable as the pool beneath it. USDG DEX depth is low on Ethereum than on Arbitrum, and a thin pool can be moved cheaply, producing either a spurious emergency fee or a masked real deviation.
Proposed venue configuration
| Venue | Role | Note |
|---|---|---|
| CEX order books (Kraken, OKX, Bullish) | Primary | Deepest USDG liquidity sits on Global Dollar Network partner venues |
| Chainlink USDG/USD | Reference | To be confirmed per chain |
Worked example. USDG trades at $0.985, a 1.5% deviation confirmed across venue types. The emergency fee is set to 1.5% plus buffer on the USDG pool. The arbitrage of acquiring USDG at $0.985 and exchanging it at par is no longer profitable, and the pool stops absorbing the weak asset. Flow between the deviation beginning and the fee landing is absorbed by the pool, which is why detection latency rather than response capability is the number that matters.
Part 4: Overall Classification
| Category | Rating |
|---|---|
| Peg stability | Low |
| Liquidity and concentration | Low |
| Smart contract | Low |
| Issuer | Very low |
| External validation | Low |
Overall: LOW RISK
The issuer, reserves, attestation standard and contract profile support listing on both deployments.
Part 5: Proposed Pathway
Phase 1. Phase 2 Testnet.
Deploy a USDG pool on testnet. Validate routing through USDZ, mint and redeem behaviour, depeg monitoring against USDG venues, and emergency fee execution on the USDG pool in isolation.
Phase 2. Mainnet listing.
| Condition | |
|---|---|
| ☐ | Monitoring validated against USDG on testnet |
| ☐ | Chainlink USDG/USD feed confirmed per chain, or an agreed alternative reference configured |
| ☐ | Historical depeg magnitude documented |
| ☐ | Pool capacity set per chain against observed depth |
Part 6: Why USDG Is Worth Listing
Stated for balance, since the assessment above is deliberately conservative.
The Global Dollar Network passes over 90% of reserve yield to its partners, which gives more than 150 organisations a direct financial interest in USDG circulating rather than sitting idle. That is a materially different distribution model from a conventional stablecoin, and it is the reason USDG has grown roughly 340% in a year.
Arbitrum has joined the network and is allocating incentives to USDG adoption, so on that chain the asset has a committed sponsor. On Ethereum, USDG sits alongside the assets we already support.
For Stabilizer, USDG fits the issuer-led liquidity approach we are pursuing across all four existing pools.
References
Approval Pathway
Team proposal, approval, forum post, 48-hour discussion period. Consistent with the USDT0, and PYUSD assessments.
