Inside the Zodia Solutions Ecosystem: Paxos on why stablecoins need infrastructure banks can trust

The problem: stablecoins were built for crypto, not for banks

The promise of stablecoins for financial institutions is straightforward: faster settlement, round-the-clock availability, and the ability to move value across borders without the delays and costs of correspondent banking. On paper, it is one of the most compelling use cases in digital assets.

In practice, the market that banks encounter when they try to act on that promise is far more complicated. The stablecoin landscape is crowded with issuers, and not all of them are built to the standard a regulated institution requires. Reserve transparency varies. Regulatory status is uneven. And the infrastructure underpinning most stablecoins was designed for crypto-native users who are not navigating the same constraints.

For a bank, the decision to adopt a stablecoin isn’t just a technology choice. It is a compliance decision, a counterparty risk decision, and a reputational decision. The institution has existing regulators to satisfy, compliance teams to align, and a reputation to protect. Getting it wrong does not just mean a bad trade; it means a regulatory conversation no one wants to have.

The result is a market where the demand from financial institutions is clear, but the supply of stablecoin infrastructure that meets institutional requirements is far smaller than it appears.

What Paxos and Global Dollar Network make possible

Paxos is a regulated blockchain infrastructure and tokenisation platform, prudentially regulated by the OCC in the US, FIN-FSA in Europe, and the MAS in Singapore. It issues USDG (Global Dollar) on behalf of the Global Dollar Network, bringing a regulated, US dollar-backed stablecoin designed for enterprise and institutional use to over 150 global partners.

For a bank building on the Zodia Solutions platform, USDG offers a stablecoin that fits inside existing compliance frameworks rather than working around them. USDG is MiCA-compliant and issued by a MAS-supervised entity, meaning institutions can integrate it into client-facing products with regulatory clarity across regions.

The practical impact is significant. A bank’s clients gain access to real-time, cross-border payments at any hour, without the delays of correspondent banking or the friction of FX conversion. Settlement happens on-chain, instantly, using a stablecoin backed by a regulated issuer with transparent reserves.

USDG also powers the Global Dollar Network, a stablecoin network that includes 150+ participants such as Robinhood, Kraken, OKX, Mastercard, and Zodia. For banks building on Zodia Solutions, USDG balances held on the platform may be eligible to earn rewards, creating a direct incentive for banks to denominate client activity in USDG and an additional value proposition that can be passed through to end clients.

The Zodia Solutions ecosystem is designed to enable direct mint and burn of USDG, allowing banks to access instant liquidity in and out of the stablecoin without needing to onboard separately with Paxos. For a bank offering payments or settlement products to its own clients, that removes a layer of friction that would otherwise slow adoption.

“Regulated financial institutions need stablecoin infrastructure they can build on with confidence. USDG was designed for exactly that, and the Zodia Solutions ecosystem gives banks the custody infrastructure layer to put it to work themselves.”

Guillaume Kendall,
Growth Lead, Paxos

Why custody is where this belongs

A stablecoin is only as useful as the infrastructure it connects to. For a bank, the decision to integrate a stablecoin into its product offering is not complete when the stablecoin is selected. It is complete when the stablecoin is embedded in an infrastructure layer that the institution controls, that regulators can audit, and that clients can trust.

Custody is that layer. It is where the bank’s governance framework meets the stablecoin’s operational reality. Mint and burn operations, balance management, transaction approvals, and compliance screening all converge at the custody layer. Without that integration, the bank is using a stablecoin. With it, the bank is operating a stablecoin-powered product under its own governance and brand. Zodia Solutions provides the technology and infrastructure that enables an institution to operate that custody layer itself.

For regulators and auditors, custody is also the point of accountability. It provides the audit trail that demonstrates the institution maintained control over the asset, that compliance checks were enforced at the point of transaction, and that the reserves backing the stablecoin are held by a regulated issuer. In a market where trust is the scarce resource, custody is where that trust is operationalised.

“Stablecoins give banks the rails. Custody gives them the controls. You need both, and they need to be connected, for a bank to offer this as a product its clients and regulators can rely on.”

Anoosh Arevshatian,
Chief Product Officer, Zodia Custody

Where this is heading

Stablecoins are no longer a question of “if” for regulated financial institutions. The question has moved to “when, and on whose rails.”

Regulatory frameworks are catching up. MiCA in Europe and the GENIUS Act in the US are giving institutions clearer ground to stand on, and as that clarity arrives, the competitive pressure to offer stablecoin-powered products will accelerate. First movers will set the standard for what an institution-grade stablecoin product looks like.

As institutions gain the ability to settle tokenised assets on-chain, they will need the cash side of those trades to move just as fast. Stablecoins are the obvious candidate for that settlement layer. The institutions that already have regulated stablecoin infrastructure embedded in their custody stack will be positioned to capture that flow. Those that do not will be building it under pressure.

Zodia Solutions and Paxos share a view of where this converges: a financial system where regulated stablecoins move as naturally as fiat between institutions, where settlement is instant and round the clock, and where the custody layer is the trusted infrastructure that makes it all possible. That system is closer than most people think.

 

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About Paxos

Paxos is the leading blockchain infrastructure and tokenization platform. Prudentially regulated by the OCC in the US, FIN-FSA in Europe, the MAS in Singapore, its products are the foundation for a new, open financial system that can operate faster and more efficiently. Today, trillions of dollars are locked in inefficient, outdated financial plumbing that is inaccessible to millions of people. Paxos is replatforming the financial system to enable assets to instantaneously move anywhere in the world, at any time, in a trustworthy way.

Paxos partners with leading global enterprises to tokenize, custody and trade assets. Its blockchain solutions are used by leaders like PayPal, Interactive Brokers, Mastercard and Mercado Libre. Paxos is licensed to engage in virtual currency business activity and is the issuer of numerous digital assets including PayPal USD (PYUSD), Pax Dollar (USDP) and Pax Gold (PAXG). Global Dollar (USDG) is issued by Paxos Digital Singapore, which is a Major Payments Institution supervised by the Monetary Authority of Singapore. USDG is also issued by Paxos Issuance Europe under the supervision of FIN-FSA and in compliance with MiCA. USDG is also available on Solana, Ink, X Layer, Ethereum and other blockchains.

Paxos is a leading fintech company with more than $500 million raised from leading investors including Oak HC/FT, Declaration Partners, Founders Fund and PayPal Ventures.

Contact: [email protected]

 

About Global Dollar Network 

Global Dollar Network is the world’s fastest growing stablecoin network with unmatched economic upside. Powered by Global Dollar (USDG), a US dollar-backed stablecoin issued by Paxos Digital Singapore and Paxos Issuance Europe, Global Dollar Network offers a transparent and equitable economic model that rewards partners for their contributions. Global Dollar Network partners include industry leaders such as Bullish, Kraken, Mastercard, OKX, Paxos, Robinhood, Worldpay and more.

Contact: [email protected]

 

About Zodia Solutions

Zodia Solutions is an institutional digital asset infrastructure platform that enables financial institutions to design, deliver and grow digital asset services through trusted, bank-grade technology and infrastructure. With leading global banks among its shareholders, Zodia Solutions supports financial institutions worldwide.

 

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This article is for information only and does not constitute financial advice, an offer of payment services, or a solicitation of any kind. Stablecoin values may fluctuate. Rewards are variable, not guaranteed, and subject to the terms of the Global Dollar Network.