Breaking: PayPal Launches Stablecoin PYUSD
On August 7, 2023, PayPal (NASDAQ: PYPL) announced the launch of a U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), aimed at transforming payments in web3 and digitally native environments. The announcement was made in San Jose, California, and marks a significant step in bridging the gap between fiat and digital currencies.
PayPal USD: Features and Functionality
PayPal USD is designed to contribute to the opportunities that stablecoins offer for payments. It is 100% backed by U.S. dollar deposits, short-term U.S Treasuries, and similar cash equivalents. The stablecoin is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.
Starting from the announcement date and rolling out in the coming weeks, eligible U.S. PayPal customers who purchase PayPal USD will be able to:
Transfer: PayPal USD between PayPal and compatible external wallets.
Send: person-to-person payments using PYUSD.
Fund purchases: with PayPal USD by selecting it at checkout.
Convert: any of PayPal's supported cryptocurrencies to and from PayPal USD.
PayPal's CEO, Dan Schulman, emphasized the need for a stable instrument that is digitally native and easily connected to fiat currency like the U.S. dollar, stating, «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.»
Profit of Stablecoin
Stablecoins have proven to be quite profitable, and PayPal's entry into this market is indicative of its potential. According to Tether, the issuer of USDT, its operational profits for April to June 2023 are over $1 billion, marking a 30% increase quarter over quarter.
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