PayPal has introduced a stablecoin named PayPal USD (PYUSD), backed by the U.S. dollar, marking a significant step in its cryptocurrency services portfolio. This marks a pioneering move by a major U.S. financial institution. The new asset aims to simplify payments in Web3 and digital native contexts. The launch coincides with the pending Congressional vote on a stablecoin bill, alongside three other crypto-related bills.
PYUSD intends to facilitate seamless transactions within virtual environments and offer direct payouts to developers. The stablecoin is redeemable for dollars and supported by dollar deposits, short-term U.S. Treasuries, and similar cash-equivalent assets.
Dan Schulman, CEO of PayPal, stated that the shift towards digital currencies necessitates a stable instrument that can seamlessly connect with fiat, like the U.S. dollar. The stablecoin is issued by Paxos, a seasoned player in the stablecoin space, and also PayPal’s partner for crypto buying and selling services.
Following this announcement, PayPal’s stock saw an increase of over 2%.
Stablecoins, which have their values pegged to underlying assets like fiat currencies or commodities, offer a less volatile alternative to typical cryptocurrencies. Despite their stability intent, they were affected by regulatory measures this year. They’re often employed for trading purposes in the cryptocurrency market, enabling faster and more cost-effective trading compared to traditional fiat transactions.
In an other news Donald Trump was reported to have Invested In Cryptocurrency`