Global payments giant PayPal has taken a significant step into the cryptocurrency industry with the launch of its own stablecoin called PayPal USD (PYUSD). This move makes PayPal one of the first major financial companies in the United States to introduce its own stablecoin, despite the regulatory uncertainties surrounding crypto assets in the country.
PYUSD is a USD-pegged stablecoin, meaning its value is fixed to the US dollar. It will be issued by Paxos Trust Co., a well-known white-label stablecoin maker. Similar to other USD-pegged stablecoins, PYUSD is backed by USD deposits, short-term treasuries, and other cash equivalents.
Initially, PYUSD can only be used for crypto and web3-related activities, such as in-game payments and exchanges with other crypto assets. However, PayPal plans to expand its usage in the future, aiming to facilitate low-cost payments and transfers between users and merchants worldwide.
PayPal will gradually roll out PYUSD to its customers in the US. Dan Schulman, the president and CEO of PayPal, sees this move as part of the company’s efforts to solidify its position in the digital payments industry. He believes there is a need for a stable asset that can bridge the gap between the traditional and digital worlds.
“The shift towards digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” Schulman stated.
Since 2020, PayPal has already added support for other cryptocurrencies, including bitcoin and ether. Users can now swap PYUSD for all supported digital assets on the platform.
This latest development from PayPal signifies the growing adoption and acceptance of stablecoins in the mainstream financial industry. As more companies and institutions enter the crypto space, the use of stablecoins provides stability and a familiar value proposition tied to traditional fiat currencies.
It remains to be seen how PayPal’s entry into the stablecoin market will impact the broader cryptocurrency ecosystem. However, this move undoubtedly demonstrates the company’s commitment to embracing the potential of digital currencies and their role in the future of global payments and transfers.
Disclaimer: This article is for informational purposes only and should not be considered investment or financial advice.
