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In the words of Dan Schulman, CEO of Paypal, “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.”
Fintech giant PayPal announced its plans to release a new stablecoin, PayPal USD (PYUSD), on the Ethereum blockchain to bridge the gap between fiat and Web3 markets.
As stated in the press release, PYUSD’s reserves are backed by USD deposits, US Treasuries, and similar fiat assets. The stablecoin will be issued by Paxos Trust Company, the company responsible for minting Binance USD (BUSD) until February 2023.
Starting in September, PayPal will publish monthly reports on PayPal USD’s reserves along with third-party attestation records on the value of the stablecoin’s reserve assets. PayPal also highlighted that the firm secured a BitLicense from the New York State Department of Financial Services (NYDFS) in June 2022.
With the release of PYUSD, PayPal now supports five cryptocurrencies, including Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). PayPal clients residing in the US can buy, sell and transfer their PYUSD assets to other US-based users without paying any transaction fees. Unfortunately, the services associated with PayPal USD will not be available for clients who reside in Hawaii.