PayPal launches PYUSD, a new US dollar-backed crypto stablecoin for payments
As you may recall back in March 2021, PayPal announced the launch of “Checkout with Crypto” to enable PayPal customers in the U.S. to checkout with cryptocurrency alongside other payment methods in the PayPal wallet. Later in August of the same year, the global payments giant launched the same program in the UK.
Fast forward almost two years later, PayPal announced today the launch of PayPal USD (PYUSD), a new US dollar-backed crypto stablecoin for payments. According to the announcement, the new stablecoin will be issued by Paxos Trust Co. and will have full backing from deposits in United States dollars, along with short-term Treasuries and comparable cash equivalents.
PayPal also added that PYUSD will always be exchangeable for the U.S. dollar and can also be swapped for other cryptocurrencies within the PayPal ecosystem. The payment platform has announced that this fresh stablecoin will soon serve as a payment option for various transactions and can be seamlessly transferred between PayPal and Venmo.
PYUSD is built on Ethereum and “designed for digital payments and Web3” PayPal said, adding that it will soon be available to United States customers.
The introduction of this stablecoin aligns with PayPal’s pursuit of becoming a dominant player in the cryptocurrency payment realm, a journey that began in 2020 when they opened the door for crypto transactions on their platform.
With a user base exceeding 350 million, PayPal already permits U.S. and U.K. users to buy, sell, and hold cryptocurrencies such as Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin, while also facilitating payments using these digital assets.
Dan Schulman, the CEO of PayPal, envisions the new stablecoin as an integral part of the broader payment infrastructure. The company confirmed its stablecoin plan in January 2022, expressing its commitment to collaborating closely with regulatory authorities during its development.
While numerous stablecoins exist in the cryptocurrency market, PayPal is set to introduce the first stablecoin from a major payment processing behemoth. Although the cryptocurrency market offers several stablecoins, PayPal is poised to make history as the first major payment processor to introduce one. Charles Cascarilla, CEO of Paxos, shared his views with Cointelegraph:
“With the launch of the first stablecoin by a leading financial institution, PayPal and Paxos are proving the real-world value of blockchain technology. PayPal USD is the most significant leap forward for digital assets and the financial industry and Paxos is proud to enable this transformative product.”
Meanwhile, PayPal currently has over 403 million active accounts globally and more than 29 million merchants. The new service could prove pivotal in helping boost the global adoption of cryptocurrency.
Below is a video overview of the new PayPal USD stablecoin.