PayPal has announced the launch of a US dollar-denominated stablecoin, PayPal USD (PYUSD).
According to the company, fully-backed, regulated stablecoins have the potential to transform payments in web3 and digitally native environments and PayPal USD is to address that emerging potential.
PayPal USD is designed to contribute to the opportunity stablecoins offer for payments and is 100% backed by US dollar deposits, short-term US Treasuries and similar cash equivalents.
PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.
Starting immediately and rolling out in the coming weeks, eligible US PayPal customers who purchase PayPal USD will be able to:
- Transfer PayPal USD between PayPal and compatible external wallets
- Send person-to-person payments using PYUSD
- Fund purchases with PYUSD by selecting it at checkout
- Convert any of PayPal’s supported cryptocurrencies to and from PYUSD
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” comments Dan Schulman, president and CEO, PayPal.
“Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
Building the Bridge Between Fiat and Web3
PayPal USD will be available to consumers, merchants and developers to seamlessly connect fiat and digital currencies.
As an ERC-20 token issued on the Ethereum blockchain, it will be available to an already large and growing community of external developers, wallets and web3 applications, can be easily adopted by exchanges, and will be deployed to power experiences within the PayPal ecosystem.
US Dollar Denominated, Redeemable and Transparent
PayPal USD is issued by Paxos Trust Company, a fully licensed limited purpose trust company subject to regulatory oversight by the New York State Department of Financial Services.
In June 2022, PayPal was issued a BitLicense by NYDFS after previously obtaining a conditional BitLicense.
Beginning in September 2023, Paxos will publish a public monthly Reserve Report for it that outlines the instruments composing the reserves.
Paxos will also publish a public third-party attestation of the value of its reserve assets.
The attestation will be issued by an independent third-party accounting firm and conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA).
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