Arbitrum, an Ethereum layer-2 network, has begun supporting USDG, a dollar-pegged stablecoin issued by Paxos and part of the Global Dollar Network consortium. The integration, announced on Tuesday, enables USDG to operate across Arbitrum's decentralized finance ecosystem, which includes platforms such as Morpho, GMX, Fluid, Maple and Kraken. Kraken will handle on- and off-ramping for the token.

USDG is designed to be redeemable one-for-one for U.S. dollars and currently circulates with a market value exceeding $3 billion across multiple blockchains. The Global Dollar Network, which oversees USDG, comprises more than 150 partners, including Robinhood, Kraken, Mastercard and OKX. Its economic model allocates rewards generated by USDG reserves to participants who help expand its use, rather than concentrating those benefits with the issuer alone.

Arbitrum currently hosts approximately $3.8 billion in stablecoins, with Circle's USDC making up about 60% of that amount, according to data from DefiLlama. While Arbitrum will not directly receive revenue from the reserve-backed income of these tokens, the new arrangement allows the network and its developers to benefit from increased activity driven by USDG.

Brendan Ma, head of investment strategy at the Arbitrum Foundation, described the development as giving the network and its builders a stake in the growth of stablecoin adoption. A governance proposal under consideration would task the ArbitrumDAO with prioritizing USDG growth, expanding the DRIP incentive program by 100 million ARB tokens, and using treasury funds to support USDG liquidity.

The move reflects a broader industry shift toward collaborative stablecoin frameworks. Earlier in the year, OpenUSD announced a competing coalition backed by Mastercard, Visa, Stripe, Coinbase and Shopify, while Qivalis emerged in Europe with support from 37 financial institutions. These initiatives aim to distribute control over issuance, distribution and economic models across multiple stakeholders rather than concentrating them in a single entity.

Arbitrum's involvement also aligns with its role in Robinhood Chain, an Ethereum-based network planned by the brokerage. Robinhood has agreed to share revenue generated by user activity on the network with participants in the Arbitrum ecosystem.

The integration marks the latest instance of a major layer-2 platform engaging with a multi-partner stablecoin framework as the digital dollar infrastructure continues to evolve.