just now
August 07, 2023 - PayPal has announced the launch of a stablecoin called PayPal USD (PYUSD) backed 1:1 by US dollar reserves.
PayPal states PYUSD aims to expand digital currency utility for payments and web3 compatibility. The stablecoin is available now to eligible US PayPal customers.
PYUSD is fully backed by bank deposits, short-term US Treasuries, and equivalent assets according to PayPal. The reserves will be regularly attested in public reports.
"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 PayPal CEO Dan Schulman. ""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."
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.
PayPal highlights PYUSD's potential for faster payments and transfers, e-commerce checkout, and connecting fiat and crypto ecosystems.
Starting today and rolling out in the coming weeks*, eligible U.S. 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 (PayPal's Checkout with Crypto feature allows customers to convert cryptocurrency to fiat currency at checkout. Transactions are settled in fiat.)
- Convert any of PayPal's supported cryptocurrencies to and from PayPal USD
PYUSD is an Ethereum-based ERC-20 token issued by regulated financial firm Paxos Trust Company. PayPal received a New York BitLicense in 2022.
*PayPal Balance account required. When a customer buys or sells cryptocurrency, including when they check out with crypto, PayPal will disclose an exchange rate and any fees a customer will be charged for that transaction. For currencies other than PayPal USD, the exchange rate includes a spread that PayPal earns on each purchase and sale. PayPal USD is not available in Hawaii.
