Paypal has introduced its own stablecoin, representing the first venture of its kind by a leading financial firm. Initially reported by Bloomberg, the launch could notably accelerate the slow integration of cryptocurrencies for payment purposes.
A New Era for Paypal: Introduction of $PYUSD Stablecoin to Facilitate Cryptocurrency Trading and Payments
On Monday, the internet is buzzing about the financial giant Paypal launching a dollar-backed stablecoin. “The vision over time is that this becomes a part of the overall payments infrastructure,” Paypal CEO Dan Schulman stated during an interview with Bloomberg.
Dubbed “paypal usd ($PYUSD),” the coin is issued by Paxos Trust Co. and is reportedly entirely supported by U.S. dollar deposits, short-term Treasury securities, and comparable low-risk assets. Tethered to the U.S. dollar, it will progressively become accessible to Paypal’s U.S. clientele, the report notes.
Through $PYUSD, Schulman hopes to solidify Paypal’s dominance in digital transactions using technology that allows swift, inexpensive transfers without a middleman. The news follows reports in February that reported Paypal was pausing its stablecoin project over regulatory concerns. At the time, a Paypal spokesperson stated that if the company moved forward, it would work very closely with financial regulators.
The report explains that at first, $PYUSD will facilitate trading cryptocurrencies and game/app-based payments. Eventually, Paypal anticipates it will enable affordable remittances and micro-payments, Bloomberg reporter Anna Irrera details. Users can transfer $PYUSD between Paypal and Venmo wallets while relying on Paxos to issue reserve reports and third-party attestations for the stablecoin.
Meanwhile, the two stablecoins issued by Paxos, $BUSD and $USDP, have seen their supplies decline considerably over the past 12 months. $BUSD’s supply dropped by 15.6% over the past 30 days and $USDP shrank by 34.1% this month. As far as $BUSD is concerned, Paxos was told by the New York Department of Financial Services (NYDFS) in mid-February to stop issuing the stablecoin.
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