PayPal, the renowned digital payment company, has taken a major step towards advancing digital payments by launching its own stablecoin called PayPal USD (PYUSD). This U.S. dollar-denominated cryptocurrency aims to promote the use of digital tokens in the country and marks the first time a leading U.S. financial firm has issued its own digital currency.
Users in the United States will now have the ability to transfer the newly launched digital token between PayPal’s platform and compatible external wallets. PYUSD can also be used for person-to-person payments without any additional charges and for purchasing goods and services.
PYUSD can be easily converted to and from PayPal’s supported cryptocurrencies, including Bitcoin, Bitcoin Cash, Ether, and Litecoin. While currently exclusive to PayPal, the stablecoin’s availability will soon expand to other popular payment applications such as Venmo.
Designed to be compatible with various crypto exchanges, PYUSD is an Ethereum-based digital token that will be accessible to external developers, wallets, and web3 applications. New York-based crypto financial services firm Paxos Trust will issue this stablecoin, which will be fully backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.
PayPal’s President and CEO, Dan Schulman, believes that digital currencies have the potential to revolutionize the entire financial system by enabling instant, low-cost, and secure transactions. Schulman also expressed hope that this new technology can enhance financial inclusion by providing affordable financial services to a wider population.
The launch of PYUSD signifies a significant milestone for PayPal, especially as it overcame regulatory obstacles and faced investigation from the New York Department of Financial Services (NYDFS) earlier this year. Despite rumors about the U.S. Office of the Comptroller of the Currency urging Paxos to withdraw its application for a full banking charter, the crypto firm denied these reports.
The market has responded positively to PayPal’s new digital token, with the company’s stock experiencing a nearly 2 percent rally following the announcement. This comes as a welcome development for PayPal investors, as the company’s shares had declined around 10 percent this year due to disappointing quarters. In fact, just last week, PayPal’s stock plummeted 14 percent after another underwhelming earnings report. Therefore, the success of PYUSD is crucial for PayPal to attract much-needed new users.
In conclusion, PayPal’s launch of its own stablecoin, PYUSD, is a significant stride in the world of digital payments. With the potential to transform the financial system and increase financial inclusion, this move showcases PayPal’s commitment to embracing cryptocurrencies. As PYUSD becomes available on other popular payment apps and garners support from external developers, the future of digital tokens looks promising.
