Digital payments giant PayPal announced the launch of its own stablecoin, denominated as PayPal USD (PYUSD). This Ethereum-powered digital token, pegged to the value of the US dollar, is set to be accessible to PayPal users within the United States, the company said in a press release.
This historic development marks the first instance of a major financial entity issuing its own stablecoin, representing a notable milestone in the integration of traditional financial services with the blockchain sector.
“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,” said Dan Schulman, president and CEO, PayPal.
“Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
The introduction of PYUSD enables seamless transferability between PayPal accounts and external wallets that support the token. It also permits users to facilitate transactions for goods and services, as well as to convert other cryptocurrencies supported by PayPal’s platform into PYUSD and vice versa.
PayPal has emphasized the wide adoption potential of this stablecoin, aiming to target an extensive and expanding community of external developers, wallets, and web3 applications. The currency’s compatibility with crypto exchanges is also a notable feature, making it a versatile digital asset within the broader blockchain ecosystem.
Issued by Paxos Trust, a cryptocurrency financial services firm based in New York, PYUSD is fully backed by deposits in US dollars, short-term Treasuries, and equivalent liquid assets. This backing ensures that the stablecoin is redeemable for its face value in US dollars at all times.
Additionally, users have the flexibility to exchange PYUSD for other cryptocurrencies available on the PayPal network, including but not limited to Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).
