In a major stride forward for digital finance, US fintech behemoth PayPal unveiled its very own stablecoin named PayPal USD (PYUSD) on Monday, August 7. This announcement reaffirms the company's commitment to leading the charge in cryptocurrency payment solutions, an endeavor it embarked upon as early as 2020.
Bridging the Gap Between Traditional and Digital Finance
The PYUSD stablecoin is tethered to the US dollar and is guaranteed by Paxos Trust Co. This assurance stems from the backing of US dollar deposits, short-term government bonds, and other comparable cash alternatives.
Furthermore, this digital asset, created on the Ethereum platform, is "designed for digital payments and Web3." In the near future, American users will be able to access this groundbreaking coin. In terms of flexibility, PYUSD promises to stand out.
Users can trade their PYUSD for US dollars whenever they wish, switch it for other cryptocurrencies via PayPal, and seamlessly transfer funds between PayPal and its popular subsidiary, Venmo. Moreover, the firm has indicated its intent to expand PYUSD as a mode of payment for a variety of products and services.
The Rise of a Crypto Payments "Giant"
Since 2020, after spearheading the integration of cryptocurrency payments on its platform, PayPal has been ardently driving its vision to dominate the realm of crypto payments. With an active user base exceeding 350 million, the company currently empowers its patrons in the US and UK with the capability to buy, trade, and store renowned cryptocurrencies such as Bitcoin, Ether, Bitcoin Cash, and Litecoin, while also facilitating transactions using these assets.
PayPal's top brass, CEO Dan Schulman, has lofty aspirations for PYUSD. He anticipates the new stablecoin will seamlessly integrate into the broader payment ecosystem. This initiative was hinted at in January 2022 when the company first announced its intent to roll out a crypto stablecoin, emphasizing its aim to align closely with pertinent regulatory bodies.
In an interview with Cointelegraph, Charles Cascarilla, CEO of Paxos, conveyed his enthusiasm about this monumental venture. He remarked, “With the launch of the first stablecoin by a leading financial institution, PayPal and Paxos are showcasing the tangible benefits of blockchain technology.
PayPal USD heralds a major advancement for digital assets and the financial sector. We at Paxos are immensely proud to facilitate this game-changing product”.