PayPal USD (PYUSD) stablecoin is designed to maintain a $1 value

Today, PayPal launched PayPal USD (PYUSD), a U.S. dollar-denominated stablecoin. As web3 gains momentum, PayPal’s newest offering aims to capitalize on the advantages stablecoins present in digital transactions.

PayPal USD is pegged 1:1 with the U.S. dollar, and its underlying assets include U.S. dollar deposits, short-term U.S Treasuries, and equivalent cash reserves. Issued by Paxos Trust Company, PayPal USD aims to provide the stability needed in the fast-evolving digital currency space.

Eligible U.S. PayPal customers will be able to transfer, send, fund purchases, and convert supported cryptocurrencies to and from PayPal USD. This announcement follows PayPal obtaining a BitLicense from NYDFS in June 2022.

Dan Schulman, PayPal’s CEO, emphasizes the importance of a stable instrument like PayPal USD, stating it “provides the foundation necessary to contribute to the growth of digital payments.”

As an ERC-20 token, PayPal USD will foster connections between fiat and digital currencies, catering to consumers, merchants, developers, and the growing web3 ecosystem. Its compatibility with the largest brands and its deployment on platforms like Venmo demonstrate its broad-reaching potential.

Paxos, the issuer, will commence publishing a monthly Reserve Report in September 2023, coupled with a third-party attestation of the reserves’ value, aligning with standards set by the AICPA. This aligns with PayPal’s focus on increasing understanding and adoption of digital currencies, not only through product innovation but also by providing educational content and working with regulators.