- PayPal has announced the launch of a USD-backed stablecoin, PayPal USD.
- The stablecoin will be used for payments, transfers, and conversions between digital assets and fiat.
PayPal has announced the launch of a new stablecoin, PayPal USD (PYUSD). The stablecoin is 100% backed by the U.S. dollar, short-term U.S. treasuries, and associated cash equivalents. The company says the stablecoin is redeemable at 1:1 for U.S. dollars.
PayPal CEO and president Dan Schulman says, “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.”
PayPal USD rollout begins on Monday to eligible customers in the U.S. Customers can transfer the stablecoin between PayPal and supported wallets, make payments, and fund purchases. They can also convert PayPal’s supported cryptocurrencies to and from the stablecoin.
USD To Reduce Friction In Digital Payments
PayPal says the stablecoin will minimize payment friction in virtual environments. The stablecoin will enable fast transfers and direct flows among Web 3.0 participants.PayPal USD will be an ERC-20 token running on the Ethereum network. Consumers, developers, and merchants can seamlessly use the stablecoin to bridge fiat and digital assets.
The launch of PayPal USD expands the scope of PayPal’s inroads in crypto. It comes after the company recently enabled purchases of digital assets for Venmo users. PayPal started integrating crypto in early 2021. Users can buy, hold, or sell major digital assets via the payment platform.
PayPal becomes the first leading U.S. fintech company to launch a stablecoin. The company has been working on the project since early 2022. Paxos, PayPal USD issuer, will publish monthly Reserve Reports on the stablecoin.
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