The global leader in online payments has announced the launch of its own stablecoin, PayPal USD (PYUSD), which is backed by the U.S. dollar and issued by Paxos Trust.
The new cryptocurrency is designed to facilitate payments and transfers in web3 and digital environments.
About PYUSD
PYUSD is a stablecoin, a type of cryptocurrency that is pegged to a fiat currency or other asset to maintain a stable value.
U.S. dollar deposits, short-term U.S. treasuries, and similar cash equivalents fully back the stablecoin and can be redeemed for U.S. dollars at a 1:1 ratio.
PYUSD is issued by Paxos Trust, a regulated trust company that also issues other stablecoins such as PAX and BUSD.
The token is also an ERC-20 token that runs on the Ethereum blockchain, which means it can be easily integrated with existing wallets, exchanges, and web3 applications.
As PYUSD rolls out, eligible U.S. PayPal customers will be able to buy, sell, hold, and transfer it in the PayPal app or website.
They will also be able to use PYUSD for person-to-person payments, fund purchases at checkout, and convert any of PayPal’s supported cryptocurrencies to and from PYUSD.
Why PYUSD?
The launch of PYUSD, according to PayPal’s CEO Dan Schulman, is part of the company’s vision to contribute to the growth of digital payments and to bridge the gap between fiat and digital currencies.
He said PYUSD makes payments easier in Web3, supports fast value transfers for friends, family, and international payments, allows direct flows to creators and developers, and helps big brands grow in digital assets.
PayPal has been actively involved in the cryptocurrency space since late 2020, enabling its U.S. customers to buy, sell, and hold selected cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
In early 2021, PayPal launched a feature that allowed U.S. customers to use their cryptocurrency holdings to pay at millions of online merchants globally.
In April 2021, PayPal enabled crypto transfers from Venmo accounts. As of late December 2022, PayPal held over $600 million worth of customers’ crypto.
PayPal’s stablecoin launch is a significant milestone for the digital payments industry, as it marks the first time a major financial company has issued its own cryptocurrency.
It also shows PayPal’s commitment to innovation and compliance in the crypto sector, as well as its recognition of the potential of stablecoins for payments.
