Giants are making constant moves to remain at the top in the crypto market. The latest entrant to the crypto arena, and unquestionably one of the most anticipated, is none other than the online payments giant, PayPal. In a landmark announcement, PayPal has unveiled its very own stablecoin, PayPal USD (PYUSD), developed in collaboration with Paxos Trust, aiming to give a tough competition to giants like Tether’s USDT and USDC.
Paxos Trust Issues PayPal USD (PYUSD)
PayPal Holdings Inc., the renowned global payments giant, has announced the launch of its very own stablecoin, marking the first such initiative by a major financial institution.
Named the PayPal USD (PYUSD), this novel stablecoin comes into existence courtesy of Paxos Trust Co. Staying true to its ‘stablecoin’ categorization, PYUSD boasts of a solid backing through US dollar deposits, short-term Treasuries, and other analogous cash equivalents. According to Monday’s revelation by the San Jose, California-based behemoth, PYUSD is pegged directly to the US dollar, ensuring stability and reliability.
In the forthcoming phases, PayPal intends to make PYUSD progressively accessible to its vast American customer base. With this bold move, PayPal is poised not only to mark its territory in the stablecoin market but also to challenge the dominance of established stablecoin heavyweights: USDT (Tether) and USDC (USD Coin).
Schulman said, “The vision over time is that this becomes a part of the overall payments infrastructure.”
PYUSD is structured to always be exchangeable for dollars and can be swapped for other digital currencies within PayPal’s ecosystem. This stablecoin can be utilized for making purchases and is on the horizon for integration into PayPal’s widely-used app, Venmo. In time, users will have the capability to transfer their PYUSD tokens between PayPal and Venmo wallets.
PayPal Expands In Crypto As Regulation Gets Clarity
Recently, congressional committee progressed a bipartisan bill to establish a clear regulatory framework for cryptocurrencies. This move came after investor losses from the unexpected downturns of crypto companies like Celsius Network and FTX. The bill, greenlit by the House Financial Services Committee, will determine if a cryptocurrency is a security or a commodity and enhance the CFTC’s crypto oversight. It also aims to define the Securities and Exchange Commission’s boundaries in the crypto realm, addressing concerns about its potential overreach.
PayPal perceives the regulatory landscape as moving towards greater transparency, according to Jose Fernandez da Ponte, the head of PayPal’s blockchain and digital currencies unit. In a recent interview, he also highlighted an increasing demand for an alternative stablecoin due to the market’s high concentration.
The recent partnership with PayPal is a significant milestone for the company following recent setback in BUSD. PayPal anticipates PYUSD to primarily serve the cryptocurrency and web3 domains, facilitating trades between different digital currencies and in-game transactions.