With the continuous encroachment of the cryptocurrency industry into the mainstream, it is no surprise that the American financial technology mammoth Paypal (NASDAQ: PYPL) has supported payments via digital assets since 2020 and is now launching its own cryptocurrency, potentially boosting the adoption of the practice.
As it happens, PayPal has announced the rollout of PayPal USD (PYUSD), an ERC-20 United States dollar-pegged stablecoin issued by crypto firm Paxos Trust Company on the Ethereum (ETH) blockchain and fully backed by USD deposits, short-term Treasuries, and similar cash equivalents, according to the company’s press release published on August 7.
What this means
Specifically, the newest development will allow users to redeem PYUSD for dollars and other cryptocurrencies at any time on PayPal’s network, as well as fund purchases, with availability on PayPal’s popular payments app Venmo, coming soon. Once fully up and running, the latter feature will enable transfers of token holdings between PayPal and Venmo wallets. Third-party wallet compatibility with PYUSD outside the PayPal network is also pending.
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In the words of PayPal’s CEO Dan Schulman, who is preparing to step down in the coming months, the stablecoin will gradually become available to customers in the US, and the company’s ultimate goal is to become the leader in digital payments using direct, fast, and cheaper transfer technology.
“The vision over time is that this becomes a part of the overall payments infrastructure,” Schulman said in an interview.
PayPal and crypto
Indeed, PayPal started its stablecoin work after the Department of Financial Services granted it a ‘BitLicense,’ issued to businesses working with digital assets. However, the work halted in February due to regulatory pressure on cryptos, which saw an investigation of Paxos for allegedly illegal sales of Binance USD (BUSD) that the US Securities and Exchange Commission (SEC) considers a security.
However, the head of PayPal’s blockchain and digital currencies team, Jose Fernandez da Ponte, said in an interview that his company now considers the regulatory environment “progressing toward more clarity” and recognizes rising demand for an alternative stablecoin in a currently highly concentrated market.
Meanwhile, PayPal has supported crypto payments for almost three years now, allowing its users to buy, sell, and hold Bitcoin (BTC) and other crypto assets using its online wallets, as well as to pay for products and services in crypto, as Finbold reported on October 21, 2020.
