PayPal launches PYUSD Stablecoin
Oct 03, 2023
Previously written: August 13, 2023
On August 7th, 2023, PayPal Announced that it has launched a U.S. Dollar Stablecoin on the Ethereum blockchain that is fully backed by the U.S. Dollar, Paxos, and the PayPal company. The intent of this venture is for PayPal to build a bridge between fiat (U.S. Dollars) and Web 3 for consumers, merchants and developers. According to PayPal, PayPal USD is designed to reduce friction for in-experience payments in virtual environments, facilitate fast transfers of value to support friends and family, send remittances or conduct international payments, enable direct flows to developers and creators, and foster the continued expansion into digital assets by the largest brands in the world.
PYUSD will be redeemable for U.S. dollars at all times, can be exchanged for other cryptocurrencies on PayPal, and will be transferable between PayPal and Venmo. The company claims it will soon be available as a mode of payment for various purchases as it continues to develop. PayPal launching a stablecoin could accelerate its efforts to become a crypto payment giant, an initiative the company started in 2020 after making way for crypto payments on the platform.
“With the launch of the first stablecoin by a leading financial institution, PayPal and Paxos are proving the real-world value of blockchain technology. PayPal USD is the most significant leap forward for digital assets and the financial industry, and Paxos is proud to enable this transformative product.” Charles Cascarilla, CEO of Paxos U.S. PayPal customers who purchase PayPal USD will be able to:
PayPal USD between PayPal and compatible external wallets
person-to-person payments using PYUSD
with PayPal USD by selecting it at checkout
any of PayPal's supported cryptocurrencies to and from PayPal USD
Why is this a big deal?
PayPal has 435 million active accounts as of 2023. Over 22.3 billion transactions were completed in 2022 on PayPal, accounting for $1.36 trillion in transaction volume. Venmo has 78 million active accounts as of 2023. In 2022, Venmo processed $245 billion in total transaction volume.
It is no secret that PayPal is attempting to grab market share of the crypto industry by making it easy to store, utilize, on-ramp and off-ramp crypto for all types of users. These two peer to peer payment systems have been utilized for years by consumers. The applications are user friendly and simple to learn. Due to PayPal’s long standing reputation, PayPal will also provide users the ability to on-ramp/off-ramp crypto funds for people who utilize banks that deny crypto transactions. With PayPal going all-in on crypto, this could be another mass adoption moment for the digital asset space.