PayPal, the online payments giant, is set to launch a US dollar-denominated stablecoin, PayPal USD (PYUSD), in a bid to address the emerging potential of fully-backed and regulated stablecoins to transform payments in Web3 and digitally native environments.
Stablecoins are cryptocurrencies that are pegged to a fiat currency or another asset, such as gold, to reduce volatility and facilitate transactions. PayPal USD is backed by US dollar deposits, short-term US Treasuries and similar cash equivalents, and can be redeemed 1:1 for US dollars. It is issued by Paxos Trust Company, a fully licensed limited purpose trust company subject to regulatory oversight by the New York State Department of Financial Services.
PayPal had reportedly halted work on its stablecoin offering in February amid increasing regulatory scrutiny, resulting in a delay of its launch. However, it seems as if things are now resolved, as PayPal announced the launch of PayPal USD on August 7, 2023.
The stablecoin will be rolled out in the coming weeks and will be available to purchase for eligible US PayPal customers, who will be able to transfer it between PayPal and compatible external wallets, send person-to-person payments with it, make purchases at checkout by selecting it as an option1, and convert any of PayPal’s supported cryptocurrencies to and from PayPal USD.
PayPal says the stablecoin has been “designed to reduce friction” for in-experience payments in virtual environments, enable quick transfers of value to support friends and family, send remittances and make international payments, enable direct flows to developers and creators, and foster the continued expansion into digital assets by the largest brands in the world.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” says Dan Schulman, president and CEO, PayPal. “Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
PayPal USD is an ERC-20 token issued on the Ethereum blockchain3, which means it will be compatible with a large and growing community of external developers, wallets and Web3 applications. It will also be deployed to power experiences within the PayPal ecosystem. PayPal USD will be the only stablecoin supported within the PayPal network and will soon be available on Venmo.
PayPal is one of the leading providers of online payment services in the world. The company has over 400 million active accounts across more than 200 markets. PayPal enables consumers and merchants to receive money in more than 100 currencies, withdraw funds in 56 currencies and hold balances in their PayPal accounts in 25 currencies. PayPal is listed on the Nasdaq Stock Market and is a constituent of the S&P 500 Index.
Leave a Reply