Key Highlights

• Partnership with Paxos: PayPal has launched the stablecoin in collaboration with Paxos, a regulated financial institution that digitizes and mobilizes assets.
• Pegged to the US Dollar: The stablecoin will be tied to the US Dollar and will be made available to PayPal’s customers in the United States in the coming weeks and months.
• An ERC-20 Stablecoin: Named PayPal USD or PYUSD, the stablecoin will be issued on the Ethereum blockchain and will be fully backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.

Silicon Valley’s renowned payments company, PayPal, announced on Monday, August 7th, the launch of a US Dollar stablecoin on the Ethereum blockchain. This significant move marks PayPal’s continued expansion into the cryptocurrency space.

PayPal Joins the Stablecoin Movement

PayPal’s CEO, Dan Schulman, emphasized the importance of a stable digital instrument connected to fiat currency like the U.S. dollar. He 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.“

Expanding Cryptocurrency Efforts

PayPal has been actively exploring the cryptocurrency and blockchain space. Last year, the company’s Vice President, Richard Nash, revealed plans to embrace all possible services related to these technologies.

Although PayPal intended to release its stablecoin earlier, it reportedly faced some setbacks. Now, eligible customers will be able to make transfers using PYUSD and make purchases with it.

Furthermore, PayPal will enable users to convert supported cryptocurrencies into or from PYUSD.

The company elaborated on the stablecoin’s potential applications, saying, “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.”

A Positive Step for the Crypto Community

PayPal’s decision to issue the stablecoin on the Ethereum blockchain is seen as a move that could be beneficial to the broader cryptocurrency community.

By integrating a stablecoin into its platform, PayPal is not only enhancing its own services but also contributing to the growing acceptance and utility of digital currencies in the global financial landscape.