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A shift toward digital currencies
In a move that could reshape the landscape of digital payments, Silicon Valley-based Payment giant PayPal has introduced its very own U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), in partnership with Paxos Trust Company. This fully-backed stablecoin is set to leverage the potential of stablecoins in web3 and digitally native environments. Regulated and backed by U.S. dollar deposits, short-term U.S. treasuries, and similar cash equivalents, PYUSD can be redeemed 1:1 for U.S. dollars.
Starting August 7 and “rolling out in the coming weeks”, eligible U.S. PayPal customers can purchase PayPal USD and enjoy a range of benefits. They can effortlessly transfer PYUSD between PayPal and compatible external wallets, engage in person-to-person payments using the stablecoin, and fund their purchases by selecting PYUSD at checkout. Additionally, they can easily convert PayPal's supported cryptocurrencies to and from PYUSD.
PayPal's president and CEO, Dan Schulman, emphasized the importance of a stable instrument in the digital currency realm, and PYUSD is designed to meet this demand.
"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," said Schulman, in a press release.
Built on the Ethereum blockchain as an ERC-20 token, PayPal USD has the advantage of being adopted by an already thriving community of external developers, wallets, and web3 applications.
By reducing friction for in-experience payments in virtual environments and facilitating fast transfers of value, PYUSD aims to support friends and family, enable remittances and international payments, and empower developers and creators. It also seeks to attract major brands to expand into digital assets, driving the adoption of stablecoins in the web3 ecosystem.
PayPal's entry into the stablecoin market marks a significant step towards the integration of traditional finance and blockchain-based economies, facilitating the mainstream adoption of digital assets and revolutionizing the way we transact in the digital age.