PayPal, the U.S.-based global payments company, on Monday, announced the launch of its own U.S. dollar-denominated stablecoin, PayPal USD (or PYUSD), which is designed to contribute to the opportunity stablecoins offer for payments.
The new digital currency is fully supported by U.S. dollar deposits, short-term U.S. treasuries, and similar cash equivalents. It is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company, a New York-based firm that provides a regulated blockchain infrastructure to clients.
PayPal’s network already supports other cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
Customers will soon be able to access PYUSD and easily convert to or from other cryptocurrencies that PayPal supports. The new stablecoin can be bought or sold through PayPal at a rate of $1.00 per 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,” said Dan Schulman, President and CEO, of PayPal.
“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.”
For those unaware, a “stablecoin” is a type of digital currency whose value is pegged to a “stable” reserve asset like the U.S. dollar or gold.
PYUSD has been launched yesterday and will become available to customers in the U.S. with PayPal Balance accounts “in the coming weeks.”
Eligible U.S. PayPal customers who purchase PayPal USD will be able to:
- TransferPayPal 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
PayPal says that when you buy or sell cryptocurrency, including when you check out with crypto, it will disclose an exchange rate and any fees you will be charged for that transaction.
“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,” PayPal wrote in a press news release.
“Most of the current volume of stablecoins is used in web3-specific environments — PayPal USD will be compatible with that ecosystem from day one.”
PYUSD will soon be available on PayPal’s popular payments app Venmo, which will eventually allow customers to send their token holdings between a PayPal and a Venmo wallet.
As an ERC-20 token issued on the Ethereum blockchain, PayPal says PYUSD will be available to an already large and growing community of external developers, wallets, and web3 applications.
It can be easily adopted by exchanges and will be deployed to power experiences within the PayPal ecosystem.
