To address the growing opportunity of cryptocurrency, PayPal launched a dollar-backed stablecoin on 7th August called PayPal USD (PYUSD).
PayPal USD is intended to add to the payment opportunities provided by stablecoins and is 100% guaranteed by US dollar deposits, short-term US Treasury bills, and comparable cash alternatives. PayPal USD is issued by Paxos Trust Company and is convertible 1:1 for US dollars.
Beginning today and continuing in the coming weeks, qualifying U.S. PayPal users holding PayPal USD will be allowed to:
- Transferred funds between PayPal and supported external wallets.
- Make PYUSD payments to individuals.
- Fund transactions with PayPal USD by choosing it at the checkout.
- Exchange any of the cryptocurrencies offered by PayPal to and from PayPal USD.
All You Need to Know About the Dollar-backed Stablecoin, PayPal USD
PayPal USD was issued by Paxos Trust business, a fully regulated confined business trust firm that is under New York State Department of Financial Services regulation. After acquiring a conditional BitLicense, PayPal was granted a BitLicense by NYDFS in June 2022.
The stablecoin asset is completely guaranteed by US dollar payments, US Treasury bonds, and comparable dollars, and PayPal USD can be purchased or traded at a rate of $1.00 per PayPal USD through PayPal.
Paxos will begin publishing a public monthly Capital Report for PayPal USD in September 2023, outlining the financial instruments that comprise the reserve pool. Paxos will also provide a public third-party verification of the worth of PayPal USD reserve assets available to the public.
The authorization will be granted by a reputable third-party accounting company and will be carried out in compliance with the American Institute of Certified Public Accountants (AICPA) attestation requirements.
Constructing a Link Between Fiat and Web3 for Consumers, Merchants, and Developers
“The move to digital currencies necessitates a stable asset that is both digitally native and easily associated with fiat currency like the US dollar,” said Dan Schulman, PayPal’s president and CEO. “Our belief in ethical creativity and conformity, as well as our history of providing novel services to our customers, offers the foundation essential for adding to the development of digital payments through PayPal USD,” he added.
PayPal USD will be accessible for customers, businesses, and developers to integrate fiat and digital currencies effortlessly. PayPal USD, as the only stablecoin accepted by the PayPal network, combines PayPal’s decades of expertise in large-scale payments with the speed, low cost, and control of blockchain technologies.
The dollar-backed stablecoin will be accessible to an existing vast and expanding community of external developers, wallets, and web3 apps as an ERC-20 token produced on the Ethereum blockchain. It will be readily adopted by exchanges and will be used to power services inside the PayPal network.
PayPal USD is intended to decrease hassle for first-time payments in online spaces, promote quick transfers of value to assist friends and family, send cash transfers or carry out payments worldwide, allow lead moves to developers and creators, and encourage the world’s largest brands’ growth into digital assets.
The majority of stablecoins are now utilized in web3-specific contexts; PayPal USD will be interoperable with the corresponding ecosystem from the start and will soon be accessible through Venmo.
Concentrating on Digital Currency Learning, Understanding, and Development
The dollar-backed stablecoin is focusing on boosting consumer and dealer understanding of cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), in addition to developing services and goods that add usefulness to digital currencies, while collaborating closely with authorities as the market matures.
Along with PayPal USD for US account holders, PayPal now allows clients to purchase, hold, sell, and transfer chosen cryptocurrencies, as well as providing instructional information to assist account holders understand the dangers and opportunities associated with the technology.
“PYUSD is the first of its kind, symbolizing the next generation of U.S. dollars on the blockchain,” Paxos wrote on the messaging network X. “This is a watershed moment not only for Paxos and PayPal but for the whole financial industry.”
Paxos 🤝 PayPal
— Paxos (@Paxos) August 7, 2023
Thrilled to be partnering with @PayPal to bring PYUSD, the world’s safest dollar-backed digital asset, to hundreds of millions of consumers and merchants worldwide.
PYUSD is the first of its kind, representing the next phase of US dollars on the blockchain. This…
PayPal as the Digital Payment Leader
For more than two decades, PayPal has been in the digital payment revolution. The PayPal platform enables hundreds of millions of consumers and merchants in more than 200 nations to participate and succeed in the global marketplace by utilizing technology to make financial services and commerce more easy, inexpensive, and trustworthy.
- PayPal Balance is necessary. We will reveal an exchange rate and any fees you may be charged when you purchase or sell cryptocurrency, including when you checkout using cryptocurrency. The conversion rate for currencies other than PayPal USD includes a margin that PayPal earns on each buy and sale. In Hawaii, PayPal USD is not available.
- Customers may convert Bitcoin to fiat cash through PayPal’s Checkout with Crypto function. Transactions are paid for in fiat currency.
Closing Thoughts
PayPal USD is frequently used to buy and sell additional digital currencies like Bitcoin and ether. Traders may join and leave positions more quickly and inexpensively than if they were working with fiat currencies like the dollar since they do not enter the regular banking system. Many people think the dollar-backed stablecoin will bring changes in the crypto market.
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