The world of decentralized finance (DeFi) continues to evolve with the introduction of innovative financial instruments that blend regulatory compliance, yield generation, and blockchain efficiency. A major milestone has been reached with the launch of Lift Dollar (USDL) on Arbitrum, marking a pivotal step forward in the integration of regulated, yield-bearing stablecoins within high-performance blockchain ecosystems.
USDL, a fiat-referenced digital asset issued by Paxos International—a regulated entity under the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM)—is now live on Arbitrum. This expansion unlocks faster, low-cost transactions while enabling users and developers across gaming, social, and DeFi platforms to access a stablecoin that distributes daily yield directly to holders.
👉 Discover how yield-bearing stablecoins are reshaping DeFi on scalable networks like Arbitrum.
What Is Lift Dollar (USDL)?
Lift Dollar (USDL) is a US dollar-backed stablecoin designed to offer both stability and passive income. Unlike traditional stablecoins that merely maintain a 1:1 peg to the US dollar, USDL goes a step further by distributing daily yield generated from its underlying reserves—primarily US Treasuries and other cash equivalents.
Each USDL token is fully backed by high-quality, liquid assets held in segregated accounts under strict regulatory oversight. This ensures transparency, security, and full redemption rights for eligible users. The yield is automatically reflected in user wallets over time, allowing holders to grow their balances without active trading or staking.
This model represents a shift toward inclusive financial innovation, where everyday users—not just institutions or advanced traders—can earn safe, predictable returns on their digital holdings.
Why Arbitrum?
Arbitrum stands out as one of the most advanced Ethereum Layer 2 solutions, offering scalability, low fees, and fast transaction finality while maintaining Ethereum-level security. By deploying USDL on Arbitrum, Paxos enables seamless integration into a thriving ecosystem of DeFi protocols, NFT marketplaces, gaming platforms, and social dApps.
Developers building on Arbitrum can now leverage a regulated, yield-generating stablecoin to power new use cases such as:
- Interest-accruing in-game currencies
- Yield-bearing social tokens
- Automated savings protocols
- Cross-border remittances with built-in yield
A.J. Warner, Chief Strategy Officer at Offchain Labs, emphasized the significance:
“Adding a regulated, yield-bearing stablecoin to the Arbitrum network will allow ecosystem innovators to build the next generation of applications and use cases.”
With USDL, Arbitrum strengthens its position as a hub for compliant and sustainable DeFi innovation.
Regulatory Oversight and Asset Security
One of the standout features of USDL is its strong regulatory foundation. Issued by Paxos International under the supervision of ADGM’s FSRA—an authority known for balancing innovation with prudential regulation—USDL adheres to stringent requirements:
- 1:1 backing by US dollars, short-duration US Treasuries, and cash equivalents
- Regular attestations and audits to verify reserve holdings
- Segregated custodial accounts to protect user funds
- Full redemption rights for eligible customers
These safeguards ensure that USDL remains not only stable but also trustworthy in an industry often plagued by opacity.
Ronak Daya, Head of Product at Paxos, highlighted this advantage:
“USDL combines the stability of US dollars with blockchain efficiency, democratizing access to safe yield. By expanding to Arbitrum, we're offering Ethereum-level security with faster, cheaper transactions.”
👉 See how compliant stablecoins are driving mainstream adoption of blockchain technology.
How USDL Enhances User Experience
For end users, USDL offers a compelling value proposition:
- Stability: 1 USDL = 1 USD at all times
- Yield Generation: Daily accrual of interest directly in your wallet
- Low-Cost Transactions: Enabled by Arbitrum’s efficient Layer 2 architecture
- Global Accessibility: Available to eligible users outside restricted jurisdictions
This means users can hold USDL for everyday spending, savings, or investment purposes—all while earning yield passively. Whether you're participating in DeFi lending pools, playing blockchain games, or sending money across borders, USDL provides a versatile and rewarding financial tool.
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These terms reflect both user search intent and the technical depth required for authoritative content in the crypto and DeFi space.
Frequently Asked Questions (FAQ)
What is a yield-bearing stablecoin?
A yield-bearing stablecoin is a digital asset pegged to a stable fiat currency (like the US dollar) that also generates returns for holders. Unlike traditional stablecoins, it distributes earnings—typically from interest-bearing reserves such as US Treasuries—directly to users’ wallets on a daily basis.
Is USDL available in the United States?
No. USDL is not available to residents of the United States, United Kingdom, European Union, Canada, Hong Kong, Japan, Singapore, or the UAE outside ADGM. This restriction is due to regulatory compliance requirements.
How does USDL generate yield?
USDL generates yield from its reserve assets, which consist of US dollar deposits, short-duration US Treasuries, and other cash equivalents. These high-quality, liquid assets produce interest income, which is distributed daily to token holders.
Can I redeem USDL for fiat currency?
Yes. Eligible and onboarded customers can redeem USDL for US dollars directly through Paxos International at any time, ensuring full convertibility and trust in the asset’s backing.
What makes USDL different from other stablecoins?
While most stablecoins only maintain price stability, USDL adds value by distributing daily yield to holders. It’s also issued by a regulated entity (Paxos International) under ADGM’s FSRA, combining compliance with innovation—a rare combination in today’s crypto landscape.
Why is launching on Arbitrum important?
Arbitrum offers fast, low-cost transactions with Ethereum-grade security. Launching USDL here allows broader access for DeFi users and developers seeking scalable solutions without sacrificing decentralization or safety.
👉 Explore the future of regulated digital assets on leading blockchain networks.
The Road Ahead for Regulated Digital Assets
The launch of USDL on Arbitrum signals a growing trend: the convergence of regulation, yield, and scalability in the digital asset space. As more users demand transparency and safety, regulated stablecoins like USDL are poised to become foundational components of the next-generation financial system.
Paxos continues to lead this transformation through its suite of tokenized assets—including PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG)—and its commitment to building infrastructure that bridges traditional finance with decentralized ecosystems.
With strategic partnerships across global enterprises like PayPal, Mastercard, and Nubank, Paxos is not just innovating—it’s redefining what financial infrastructure can be.
As blockchain adoption accelerates, assets like USDL demonstrate that compliance and innovation don’t have to be mutually exclusive. Instead, they can work together to create safer, more inclusive financial tools for users worldwide.