As if it were 2019, PayPal just launched its own stablecoin. The company says its PayPal USD (PYUSD) cryptocurrency is backed by US dollar deposits, short-term US Treasury notes and equivalent assets, and can be exchanged 1:1 for US dollars.
“Moving to digital currencies requires a stablecoin that is digitally native and easily pegged to a fiat currency such as the US dollar,” Dan Schulman, CEO of PayPal, said in a statement.
PayPal in US dollars It is based on an ERC-20 token issued on the Ethereum blockchain and is the only stablecoin supported within the PayPal network. It’s available to PayPal customers in the US, except for those who live in Hawaii. Currently, it allows consumers, merchants, and developers to make transfers, fund purchases, and convert cryptocurrencies supported by PayPal, namely Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
In the future, it will also be available for external wallets and web applications 3 with the speed, affordability, and programmability of the Ethereum blockchain. PYUSD is coming to Venmo soon and hopes to be part of the payment ecosystem in virtual environments like games and the metaverse in the future. Also for sending money to friends and family in other countries, which has always been a practical use of cryptocurrency in countries with low currency values or high inflation.
As collateral for the 1:1 change, Paxos will publish a monthly report on PayPal’s US dollar reserves which will detail the instruments that make it up. We wish PayPal better luck than Facebook’s stablecoin (Libra/Diem), which has faced some expected friction from regulators.
