PayPal have announced the launch of a U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), marking their full entrance into the world of Cryptocurrency.
There are two important takeaways, firstly that a stablecoin is designed to be relatively immune to the type of cryptocoin speculation we’ve seen with the likes of Bitcoin – it’s value is pegged to a real currency. Secondly, it’s recognition of the need to be able to transact in a Web3 world with blockchain payments but in a manner that all parties know the real world currency value of the monies exchanged.
PayPal USD 100% backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents, is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.
Currently only available in to U.S. customers (which kind of limits the whole point of virtual currency!!), eligible PayPal customers who purchase PayPal USD will be able to:
- Transfer PayPal USD between PayPal and compatible external wallets
- Send person-to-person payments using PYUSD
- Fund purchases with PayPal USD by selecting it at checkout
- Convert any of PayPal’s supported cryptocurrencies to and from PayPal USD
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– Dan Schulman, president and CEO, PayPal
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.
PayPal USD is designed to reduce friction for in-experience payments in virtual environments, facilitate fast transfers of value to support friends and family, send remittances or conduct international payments, enable direct flows to developers and creators, and foster the continued expansion into digital assets by the largest brands in the world. Most of the current volume of stablecoins is used in web3-specific environments – PayPal USD will be compatible with that ecosystem from day one and will soon be available on Venmo.