Financial services company PayPal Holdings has launched its own PYUSD steiblcoin. PayPal assures that it is fully backed by USD deposits, short-term treasury bonds and similar cash equivalents. The price of the token is pegged to the dollar, and access to it will start appearing to PayPal customers in the U.S. gradually in the near future.
The issuer of PYUSD is the fintech firm Paxos Trust. PYUSD can be exchanged for dollars or cryptocurrencies available in the PayPal network, it can be used to pay for purchases, it will also appear in the PayPal Venmo app and will be available on third-party compatible crypto wallets.
PayPal expects that at first PYUSD will be used mainly in the cryptocurrency and web3 sectors, for example, for trading digital tokens and in-game purchases. Gradually, the company expects that the stablecoin will also be used for money transfers.
With the help of PYUSD, PayPal CEO Dan Shulman aims to strengthen the company's position in the digital payments market. In a comment to Bloomberg, he said that, in line with the company's vision, steblecoins "will become part of the overall payment infrastructure." As Jose Fernandez da Ponte, head of PayPal's blockchain and digital currencies team, added, the regulatory framework in the U.S. has recently been "moving toward greater clarity" on stablecoins, and demand for them is growing.
Before introducing the token, PayPal, according to Shulman, discussed the initiative with regulators and policymakers.
"Now, because of those conversations, we're in a situation where people feel comfortable with a respected, well-regulated U.S. financial institution entering the steiblcoin market," he said.
PayPal said that starting in September, Paxos will publish monthly reports detailing the assets backing PYUSD. Paxos will also publish a third-party testimonial from an accounting firm about the token's reserve assets.