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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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