PayPal, the well-known global payments company based in the U.S., has announced the launch of its own stablecoin called PayPal USD (PYUSD). This new digital currency is specifically designed to tap into the potential of stablecoins for facilitating payments.
The PYUSD is fully backed by deposits in U.S. dollars, short-term U.S. treasuries, and similar cash equivalents. Essentially, it holds a 1:1 value with the U.S. dollar and is issued by Paxos Trust Company, a reputable New York-based firm that specializes in providing a regulated blockchain infrastructure.
It’s worth noting that PayPal’s platform already supports various other cryptocurrencies like Bitcoin, Ethereum, and Litecoin. Soon, PayPal customers will have the ability to access PYUSD and seamlessly convert it to or from other cryptocurrencies that PayPal accommodates. This new stablecoin can be acquired or sold through PayPal at an exchange rate of $1.00 per PYUSD.
Dan Schulman, PayPal’s President and CEO, highlighted the importance of a stable digital instrument that is closely connected to traditional fiat currency in the context of the ongoing shift towards digital currencies. He emphasized PayPal’s commitment to innovation and compliance, asserting that the introduction of PYUSD aligns with their track record of delivering enhanced experiences to customers and contributing to the growth of digital payments.
For those unfamiliar with the term, a “stablecoin” is a type of digital currency whose value is pegged to a reliable reserve asset, often a major currency like the U.S. dollar or even a precious metal like gold. PYUSD was officially launched recently and will gradually become accessible to U.S. customers who hold PayPal Balance accounts in the following weeks.
Eligible PayPal customers in the U.S. who decide to purchase PYUSD will have the following capabilities:
- Transfer PYUSD between PayPal and compatible external wallets.
- Send person-to-person payments using PYUSD.
- Use PayPal USD to make purchases by selecting it as a payment option during checkout.
- Convert any of PayPal’s supported cryptocurrencies to or from PayPal USD.
PayPal has assured users that they will transparently disclose the exchange rate and any associated fees when buying or selling cryptocurrency, including transactions made with PYUSD.
The release of PayPal USD aims to streamline in-app payments within virtual environments, enable rapid transfers of value for various purposes, support international payments and remittances, and facilitate direct flows to developers and content creators. It is expected to synergize seamlessly with the web3 ecosystem.
Additionally, PayPal has shared plans to make PYUSD available on its popular payments app, Venmo, which will eventually allow users to move their token holdings between PayPal and Venmo wallets.
As an ERC-20 token operating on the Ethereum blockchain, PYUSD is set to benefit from the vast community of external developers, wallets, and web3 applications. Its adoption is expected to extend beyond PayPal’s ecosystem, contributing to the broader digital assets landscape.
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