PayPal has introduced a US Dollar Stablecoin
The introduction of PayPal USD (PYUSD), a stablecoin pegged to the US dollar, was announced by the digital payments company PayPal on Monday.
PayPal USD is 100% backed by short-term U.S. Treasuries, comparable cash equivalents, and U.S. dollar deposits in order to contribute to the payment opportunities stablecoins provide. PayPal USD is issued by Paxos Trust Company and is redeemable 1:1 for US dollars.
Beginning today and spreading out over the next few weeks, qualified PayPal users in the US who buy PayPal USD will be able to:
USD transfers between PayPal and compatible third-party wallets
PYUSD may be used to send payments between people.
Select PayPal USD at checkout to pay for items.
Convert any of the cryptocurrencies that PayPal supports into and out of PayPal USD.
According to Dan Schulman, president and chief executive officer of PayPal, the transition to digital currencies calls for a reliable instrument that is both digitally native and readily interconnected to fiat money like the U.S. dollar. Our dedication to responsible innovation and compliance, as well as our track record of providing innovative experiences to our clients, offer the basis necessary to contribute to the expansion of digital payments through PayPal USD.
Creating a Bridge Between Web3 and Fiat for Users, Businesses, and Developers
Customers, businesses, and developers will be able to link fiat and digital currencies with ease using PayPal USD. PayPal USD, the only stablecoin supported by the PayPal network, takes use of the speed, low cost, and programmability of blockchain technologies in addition to PayPal's decades of expertise in large-scale payments. PayPal USD will be made available to an existing sizable and expanding community of external developers, wallets, and web3 apps as an ERC-20 token released on the Ethereum blockchain. It may be quickly accepted by exchanges and used to power experiences inside the PayPal ecosystem.
With PayPal USD, you can send money quickly to friends and family, send remittances, and make international payments. PayPal USD also makes it possible for you to send money directly to developers and other creators, which encourages the biggest brands in the world to keep investing in digital assets. The majority of stablecoin usage at the moment is in web3-specific contexts; PayPal USD will be immediately interoperable with that ecosystem and will shortly be accessible on Venmo.
Denominated in US dollars, redeemable, and transparent
The firm that issues PayPal USD is Paxos Trust firm, a limited purpose trust corporation with a full licence that is regulated by the New York State Department of Financial Services. After receiving a conditional BitLicense first, in June 2022, NYDFS granted PayPal a full BitLicense.
PayPal USD may be purchased or sold through PayPal at a cost of $1 per PayPal USD. PayPal USD reserves are completely guaranteed by U.S. dollar deposits, U.S. Treasuries, and comparable cash equivalents.
Starting in September 2023, Paxos will make available a Reserve Report for PayPal USD that lists the instruments that make up the reserves on a monthly basis. A public third-party attestation of the value of PayPal USD reserve assets will also be made available by Paxos. The attestation will be carried out in line with the American Institute of Certified Public Accountants' (AICPA's) attestation requirements and provided by a neutral third-party accounting firm.
Putting an emphasis on Digital Currency Education, Understanding, and Adoption
PayPal is committed to improving consumer and merchant understanding of cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), working collaboratively with authorities as the sector develops, in addition to developing products and services that enhance the usability of digital currencies. PayPal now gives users the option to purchase, hold, sell, and transfer a limited number of cryptocurrencies in addition to PayPal USD for U.S. account holders. PayPal also offers instructional information to help account holders understand the benefits and drawbacks of the technology.
