PayPal Launches PYUSD Stablecoin
PayPal is expanding its digital payments network with the introduction of a new stablecoin.
This week, PayPal announced the launch of a United States dollar-backed stablecoin called PayPal USD — or PYUSD. These coins will be redeemable at a 1:1 ratio for U.S. dollars and will be issued by Paxos Trust Company. In the coming weeks, customers will be able to transfer PYUSD between PayPal and compatible external wallets, send the stablecoin as P2P payments, use PayPal USD at PayPal Checkout, and convert PYUSD to or from other cryptocurrencies supported by the platform. PYUSD will also soon be available for Venmo.
PayPal notes that reserves for their coin will be fully backed by U.S. dollar deposits, U.S. Treasuries, and other cash equivalents. Furthermore, beginning in September, Paxos will publish a PYUSD reserve report on a monthly basis. This report will outline the composition of PayPal’s reserves and will provide a third-party attestation of the value.
What they’re saying:
Discussing the debut of PYUSD, PayPal’s president and CEO Dan Schulman stated, “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar. 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.”
Elsewhere, in their press release, PayPal stated, “As the only stablecoin supported within the PayPal network, PayPal USD leverages PayPal’s decades-long experience in payments at scale, combined with the speed, cost and programmability of blockchain protocols. As an ERC-20 token issued on the Ethereum blockchain, PayPal USD will be available to an already large and growing community of external developers, wallets and web3 applications, can be easily adopted by exchanges, and will be deployed to power experiences within the PayPal ecosystem.”
In many ways, PayPal offering its own stablecoin makes a lot of sense. Given the fact that the company remains a force in digital payments, the introduction a PYUSD allows them to stay up to date on new technology while also keeping consumers safe. On that note, just as they previously did by offering other cryptocurrencies, PayPal’s expansion into stablecoins will help further legitimize crypto at a time when regulatory scrutiny is growing. Ultimately, it will be interesting to see how PSUSD is embraced and utilized going forward and what will be next for digital payments at PayPal and beyond.