PayPal launches dollar-backed cryptocurrency
PayPal has taken a bold step forward into the future of digital payments with the launch of its own backed and regulated stablecoin, the PayPal USD (PYUSD). In an announcement that marks a milestone in the evolution of digital transactions, PayPal is driving the adoption of stablecoins as a trusted solution for financial operations in digital-native and web-based environments3.
PayPal USD, designed to harness the potential of stablecoins in the payments space, is backed entirely by US dollar deposits , short-term US Treasuries, and similar cash equivalents. Each unit of PYUSD is redeemable for one US dollar , ensuring a constant and reliable peg. The issuance of this stablecoin is carried out by Paxos Trust Company.
Starting today and in the coming weeks, eligible US PayPal customers will be able to access a number of features when purchasing PayPal USD, including the ability to transfer PayPal USD between PayPal accounts and compatible external wallets; make payments between people using PYUSD; finance purchases by selecting PayPal USD as a payment method in the purchase process; and convert any of the cryptocurrencies supported by PayPal to PayPal USD and vice versa.
“Our commitment to responsible innovation and regulatory compliance, coupled with our experience in delivering new experiences to our customers, lays the necessary foundation to contribute to the growth of digital payments through PayPal USD,” said Dan Schulman, president and CEO of PayPal .
THE PAYPAL USD PROPOSAL
PayPal USD acts as a bridge between fiat currency and the web3 , allowing a seamless connection between traditional currencies and cryptocurrencies. Leveraging PayPal’s infrastructure and experience in payment processing, PayPal USD takes advantage of the speed, cost, and programmability of blockchain protocols. Additionally, being an ERC-20 token on the Ethereum blockchain , PayPal USD easily integrates into the growing community of developers, wallets, and web3 applications.
PayPal USD’s value proposition focuses on facilitating payments in virtual environments , streamlining value transfers, supporting international remittances and payments, enabling direct flows to developers and creators, and fostering the expansion of digital currencies among the world’s leading brands. world. While most stablecoins are used in specific web3 environments, PayPal USD has supported that ecosystem since launch and will soon be available on Venmo .
REGULATION AND TRANSPARENCY
Transparency and regulation are key issues for PayPal USD. Issued by Paxos Trust Company, PayPal USD has reserves backed by deposits in US dollars, US Treasuries and cash equivalents.
Additionally, starting in September 2023, Paxos will publish monthly public reserve reports for PayPal USD, detailing the instruments that make up the reserves. Additionally, a third-party public certification of the value of PayPal USD reserve assets will be provided , endorsed by an independent accounting firm and in accordance with the certification standards established by the American Institute of Certified Public Accountants (AICPA).
With a vision focused on education and understanding of digital currencies , PayPal also works closely with regulators and industry to promote the responsible use of emerging technologies . In addition to PayPal USD, the platform offers the ability to buy, hold, sell and transfer select cryptocurrencies, along with educational content to help users understand the risks and possibilities associated with the technology.