PayPal, a leading global online payment platform, has recently unveiled its stablecoin, known as PayPal USD (PYUSD). This new digital currency is tied to the value of the U.S. dollar and is backed by secure and liquid assets. The move is seen as a bold step into the emerging field of cryptocurrencies, especially as regulators around the world are increasing their scrutiny of the crypto sector.
PayPal is the Latest Company to be Part of the Stablecoin Craze
PayPal’s stablecoin venture is not the first of its kind, as several other companies and projects have already issued their versions of digital dollars, such as USDC, Tether, and Binance USD. However, PayPal claims that its stablecoin stands out from the competition in terms of trust, security, and compliance.
As stated by José Fernández da Ponte, who serves as PayPal’s Senior Vice President and General Manager of Blockchain, Crypto, and Digital Currencies, the PayPal USD stablecoin is fully backed by deposits in U.S. dollars, short-term U.S. treasuries, and other similar cash equivalents. This means that it can be exchanged for U.S. dollars on a 1:1 basis at any time.
He also emphasized that PayPal USD is issued by Paxos Trust Company, a fully licensed and regulated entity by the New York State Department of Financial Services (NYDFS).
Da Ponte also denied a recent report that suggested that PayPal had paused its stablecoin development due to regulatory pressure from the U.S. Securities and Exchange Commission (SEC) and the NYDFS.
He said that PayPal had been working closely with regulators and had received their approval for its stablecoin launch. PayPal’s stablecoin launch is part of its broader strategy to embrace digital currencies and offer more choices and opportunities to its customers.
The company already allows its users to buy, sell, hold, and use various cryptocurrencies within its app or website. PayPal has announced that it will be introducing new features for its stablecoin, PayPal USD (PYUSD).
These features include the ability to transfer PYUSD between PayPal and other compatible digital wallets, make person-to-person payments using PYUSD, use PYUSD to pay for purchases at checkout, and exchange other supported cryptocurrencies for PYUSD within the PayPal platform.