The PayPal payment service has launched its own stable cryptocurrencypegged to the US dollar – the digital asset is backed by cash deposits, short-term government bonds and other cash equivalents. Over time, the stablecoin will be available to all PayPal users in the US.
PayPal USD (PYUSD) is issued by cryptocurrency company Paxos Trust. A stablecoin can be exchanged for dollars or other cryptocurrencies available on the PayPal network at any time. The digital asset can also be used as a means of payment; It will soon appear in the popular payment application PayPal Venmo, as well as third-party crypto wallets outside of the PayPal network.
The payment service PayPal, which now has more than 431 million users worldwide, began introducing cryptocurrencies in 2020: they are available on the platform for buying and selling as well as for making payments. The administration of the service assumes that the PYUSD token will initially be used in the cryptocurrency space and Web3 applications for trading digital assets and conducting in-game transactions, and then gradually spread as a means of money transfers and micropayments .
Cryptocurrency experts have long believed that stablecoins are the best vehicle for cheap instant transfers and payments. However, the proliferation of these assets is hampered by central banks busy issuing official digital currencies and the failure of private cryptocurrency projects, the largest of which was the collapse of the pair Luna and TerraUSD in May last year. In February, the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing the BUSD stablecoin for crypto exchange Binance.
PYUSD does not appear to be in danger: PayPal has received a license for a cryptocurrency project in the state of New York, and the stablecoin will be a regulated product. Starting in September, Paxos will publish monthly reports detailing the assets supporting PYUSD.