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Paypal is entering the world of cryptocurrency with a dollar-pegged digital currency
- PayPal has announced the launch of its stablecoin cryptocurrency PayPal USD, which is built on the Ethereum blockchain technology pegged to the dollar.
- The coin will be issued by Paxos Trust Co, and the official launch will take place in the coming weeks for use in purchases, money transfers and between other cryptocurrencies.
- The move signals PayPal's long-term vision of using stablecoin to transform payment methods in the new Internet (Web3).
PayPal is preparing to enter the world of cryptocurrency with its new stablecoin “Paypal USD”. Built on the Ethereum blockchain technology and pegged to the US dollar, the new PayPal coin aims to make transactions, money transfers, and virtual payments more seamless. This step also comes at a time when the cryptocurrency market is witnessing several fluctuations with the aim of developing the industry after the multiple collapses it witnessed.
In a recent announcement, PayPal unveiled PayPal USD (PYUSD), a stablecoin designed for payments that is fully backed by US dollar deposits. The new coin will be issued by Paxos Trust Co of New York, and the official launch to customers is expected in the coming weeks.
Customers can buy or sell PYUSD for $1 through the PayPal website or app, as well as use the currency to make payments, fund purchases, and convert between other supported cryptocurrencies. Where PayPal believes that its cryptocurrency will facilitate the payment experience in virtual environments and simplify financial transfers between family and friends.
PayPal USD is aiming for the long-term vision of payment transfer in Web3, according to the company. Dan Schulman, President and CEO of PayPal, emphasized the need for a stable instrument that can be easily pegged to a traditional currency such as the US dollar, in light of the ongoing move towards digital currencies.
Although stablecoins are considered less volatile and safer than other cryptocurrencies due to being tied to a tangible asset, they are not completely risk-free. Last year we witnessed the collapse of the stablecoin Terra, which resulted in an estimated loss of $450 billion from the cryptocurrency market.