In a strategic move signaling its entry into the cryptocurrency landscape, PayPal, the renowned global online payment giant, has introduced its proprietary dollar-pegged stablecoin, named PayPal USD (PYUSD). This collaborative endeavor with Paxos Trust Co. is poised to integrate PYUSD into the very foundation of PayPal’s expansive payments ecosystem, as elaborated by CEO Dan Schulman.
PYUSD derives its stability from a blend of short-term treasuries, dollar deposits, and cash equivalents, as detailed in the official announcement by the company. The stablecoin’s issuance will occur as an ERC-20 token on the Ethereum network, aligning with the inherent advantages of blockchain technology.
A stablecoin is a specific category of cryptocurrency engineered to maintain a consistent valuation by mirroring the price of a designated fiat currency, such as the U.S. dollar. Established market leaders in this sector encompass Tether (USDT) and Circle (USDC). PayPal’s introduction of its stablecoin is predicted to complement its existing suite of cryptocurrency services, enabling users to seamlessly convert dollar-linked tokens into liquid assets or other holdings within the PayPal ecosystem.
Eligible U.S.-based users are set to access the capabilities of PayPal USD. This encompasses the ability to effectuate transfers of the stablecoin between PayPal and compatible external wallets, facilitate peer-to-peer transactions using PYUSD, and execute exchanges between PayPal-supported cryptocurrencies and PayPal USD during merchant transactions.
This landmark announcement builds upon PayPal’s prior endeavors within the cryptocurrency sphere. In March 2021, the company launched a crypto checkout service tailored for merchants, empowering users to complete transactions using digital currencies. Subsequently, in May of the same year, PayPal solidified its crypto engagement by fostering integrations with third-party platforms, facilitating the acquisition of Bitcoin and subsequent transfers.
Notably, Paxos Trust Co., the driving force behind PayPal’s stablecoin, has demonstrated a commitment to transparent operations. Paxos will commence releasing public monthly reserve reports, commencing next month, outlining the composition of assets underpinning PayPal USD. Moreover, the company will facilitate independent third-party attestations pertaining to the valuation of the stablecoin’s reserve assets, conforming to the standards stipulated by the American Institute of Certified Public Accountants (AICPA).
Praising the partnership’s potential to underscore the real-world applicability of blockchain technology, Charles Cascarilla, CEO and Co-Founder of Paxos, lauds the launch of PYUSD as a substantial leap forward for the digital asset domain and the financial sector.
The introduction of PayPal USD follows Paxos Trust Co.’s decision earlier this year to sever ties with leading cryptocurrency exchange Binance. This decision came in response to legal actions initiated by the U.S. Securities and Exchange Commission (SEC), alleging breaches of investor protection regulations.
Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. The content provided is based on information available as of the stated date, and subsequent developments may influence the presented context or details.
