PayPal has launched a US dollar denominated stablecoin, designed for digital payments and Web3, and to be compatible with the most widely used exchanges, wallets and Web3 apps
PayPal USD (PYUSD) is fully backed by US dollar deposits, short-term US treasuries and similar cash equivalents, and can be redeemed 1:1 for US dollars.
Starting today and rolling out in the coming weeks, eligible US PayPal customers who purchase PayPal USD will be able to transfer the token to external wallets, send person-to-person payments, fund purchases at checkouts supported by PayPal, and convert cryptocurrency holdings to and from Paypal USD.
"The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar," says 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."
Most of the current volume of stablecoins is used in web3-specific environments, but Paypal's global brand recognition seems certain to propel the novel payments asset into the mainstream. Schulman says PayPal USD will be compatible with the Web3 ecosystem from day one and will soon be available on Venmo.
As an ERC-20 token issued on the Ethereum blockchain, PayPal USD is managed by Paxos Trust Company. In an effort to build trust in the token, Paxos will publish a public monthly Reserve Report for PayPal USD that outlines the instruments composing the reserves. Paxos will also publish a public third-party attestation of the value of PayPal USD reserve assets.