PayPal’s stablecoin opens door for crypto adoption in traditional finance
Global payment processing giant PayPal announced its United States dollar-pegged payment stablecoin called PayPal USD (PYUSD) on Aug. 7.
The stablecoin is developed on Ethereum (ERC-20) and will be issued by Paxos Trust Co. PYUSD is reportedly fully backed by U.S. dollar deposits, short-term Treasurys and similar cash equivalents.
PayPal said that the launch showcases the company’s focus on becoming a crypto payment giant and aims to make the stablecoin a key part of its payment infrastructure. PYUSD is currently being rolled out for selected customers in the United States.
The payment technology firm first confirmed its plan to launch a stablecoin in January 2022, nearly two years after it had made way for users in the U.S. and the United Kingdom to buy, sell and store cryptocurrencies in their PayPal accounts.
PYUSD will be primarily used for remittances as well as a mode of payment for millions of PayPal merchants. The firm noted that the new stablecoin will be made available on Venmo in the near future, where users will be able to transfer it between the two platforms. The stablecoin will also be transferable with wallets that support PYUSD, such as Coinbase Wallet and MetaMask.
The crypto stablecoin market cap is $125 billion at the moment, primarily dominated by two players — Tether (USDT) with a $86.5-billion market capitalization followed by Circle-issued USD Coin (USDC) with a $26-billion market cap. The rest of the market share is taken up by the likes of Binance-supported stablecoins such as Binance USD (BUSD), TruUSD (TUSD) and a few others. While there are several stablecoins players in the market, PayPal’s stablecoin will be the first issued by a major payment processor.
The launch of PYUSD was welcomed by most
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