The payments behemoth PayPal has announced its entry into the cryptocurrency market with its own stablecoin called PayPal USD (PYUSD). This Ethereum-based token pegged to the U.S. dollar, will be the first stablecoin issued by a major financial company.
According to the report, the stablecoin will soon be available to PayPal users in the United States, enabling them to transfer PYUSD between PayPal and supported external wallets, make purchases of goods and services, and convert between different cryptocurrencies on the PayPal network.
PYUSD is being issued by Paxos Trust, a crypto financial services firm based in New York. The stablecoin is fully backed by deposits in U.S. dollars, short-term Treasuries, and similar cash equivalents.
It can be redeemed for dollars at any time and can also be exchanged for other cryptocurrencies such as bitcoin (BTC), bitcoin cash (BCH), ether (ETH), and Litecoin (LTC) available on PayPal’s network.
Dan Schulman, the President and CEO of PayPal, stated that the growth of digital payments and the shift towards digital currencies necessitate a stable and easily connected instrument that is digitally native.
Schulman expressed confidence in PayPal’s commitment to responsible innovation and compliance, emphasizing their track record in delivering new customer experiences as the foundation for contributing to the growth of digital payments through PayPal USD.
Initially, PYUSD will be made available on Venmo, PayPal’s popular payments app. Additionally, PayPal plans to address concerns about unbacked tokens by providing attested reports of the funds backing the stablecoin.
Starting from September 2023, Paxos will publish a public monthly Reserve Report for PayPal USD, detailing the composition of the reserves. Furthermore, an independent third-party accounting firm will issue public attestations of the value of PayPal USD reserve assets, ensuring compliance with standards established by the American Institute of Certified Public Accountants (AICPA).
This move by PayPal marks a significant step in the adoption of cryptocurrencies by major financial institutions and is set to contribute to the growth and acceptance of digital payments in the market.
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London, United Kingdom, 21st November 2024, Chainwire