Paypal, the well-known payment processing company, has made a bold move towards cryptocurrency integration by announcing the creation of its own stablecoin, named PayPal USD (PYUSD), on August 7th.
This digital currency, tied to the value of the U.S. dollar, will be managed by Paxos Trust Co. and will maintain a full reserve in U.S. dollar deposits, short-term Treasury bonds, and other cash equivalents. Paypal has disclosed that PYUSD will be accessible to customers in the United States shortly.
PYUSD will offer the ability to be exchanged for dollars at any time and can also be converted into other cryptocurrencies within Paypal’s platform. Additionally, the company has communicated that this stablecoin will be a payment option for various purchases and can be transferred between Paypal and Venmo accounts.
This launch represents a significant step in Paypal’s strategy to establish itself as a major player in the cryptographic payment arena, a direction it took in 2020 by enabling transactions with cryptocurrencies.
Paypal’s CEO, Dan Schulman, sees PYUSD as an opportunity to integrate it into the global payment structure, thereby strengthening the connection between traditional and digital finance.
Despite the presence of several stablecoins in the market, Paypal stands out as the first major payment processing entity to launch its own.
The company’s intention to develop a stablecoin was first confirmed in January 2022, assuring that it would work in collaboration with regulators to ensure compliance and security.