Global payments behemoth PayPal is bolstering its crypto game with the launch of its native dollar-pegged stablecoin, PayPal USD, in conjunction with Paxos.
According to the August 7 announcement, the Ethereum-based token will be “gradually” made available to PayPal users in the United States. PayPal USD is expected to become “a part of the overall payments infrastructure,” PayPal CEO Dan Schulman reportedly told Bloomberg.
PayPal Dives Deeper Into Crypto Payments With PYUSD Launch
PayPal has made a huge move into the stablecoin sector with the launch of its very own digital asset.
PayPal USD (PYUSD) is fully backed by short-term Treasuries, U.S. dollar deposits, and cash equivalents, as per the company’s press release. The token will be issued by New York-headquartered crypto financial services firm Paxos Trust on the Ethereum blockchain as an ERC-20 token.
The stablecoin allows users to conduct transfers within the platform and with supported external wallets. The dollar-denominated token can also be used for purchases and swap for other assets, such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash on the PayPal platform.
PayPal introducing a stablecoin could spur its efforts to become a crypto payment giant, an endeavor the company began in 2020 after making way for cryptocurrency payments on the platform.
“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,” PayPal president and CEO Dan Schulman posited in the statement. “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 stablecoin further offers compatibility with a wide range of developers, wallets, and Web3 applications:
“Most of the current volume of stablecoins is used in web3-specific environments — PayPal USD will be compatible with that ecosystem from day one and will soon be available on Venmo.”
While there are numerous stablecoins available in the cryptocurrency market, PayPal USD will be the first launched by a major U.S. financial institution. PayPal indicated that though services and availability of PYUSD begin today, the rollout is expected to continue in the coming weeks.
Paxos To Publish Monthly Reserve Reports For PayPal USD
On the transparency front, Paxos will be publishing public monthly reserve reports for PayPal USD defining the instruments comprising the stablecoin’s reserves starting September 2023.
Moreover, Paxos will be required to publish public third-party attestations of the value of the stablecoin’s reserve assets. This attestation will be provided by an independent third-party accounting company and executed per attestation criteria developed by the American Institute of Certified Public Accountants (AICPA).
The news of PayPal’s stablecoin launch comes after the U.S. Securities and Exchange Commission (SEC) planned to launch a lawsuit against its crypto partner Paxos for breaking investor protection laws.