PayPal, the American multinational financial technology company, has launched a dollar-pegged stablecoin dubbed PayPalUSD, in an attempt to enter the world of virtual currencies. As per a recent Bloomberg report, the stablecoin fully backed by US Dollar deposits, short-term Treasuries, and similar cash equivalents, is issued by the blockchain platfrom Paxos Trust Company.
PayPal announced on August 7 via a press release, the launch of the PayPalUSD, assuring that the assets would be available to US customers in the coming days. The statement read:
Fully-backed, regulated stablecoins have the potential to transform payments in web3 and digitally native environments. To address that emerging potential, PayPal (NASDAQ: PYPL) today announced the launch of a U.S. dollar-denominated stablecoin, PayPal USD (PYUSD).
Jose Fernandez da Ponte, the Head of PayPal’s blockchain team commented on the company’s strive towards achieving a distinct and definite position in the fast-growing market. He pointed out that PayPal believes that the regulatory environment is “progressing toward more clarity”, necessitating the urgency for an alternative stablecoin.
Notably, the launch of PayPalUSD is focused on establishing the company’s dominance in the digital payment space. Dan Schulman, the company CEO asserted that PayPal intends to fix its position at the forefront of the cryptocurrency market, with the aid of stablecoins. Shedding light on the agenda behind the introduction of the stablecoin, the CEO added,
The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. 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.
As per the report, PYUSD would be redeemable for the US dollar at any time. In addition, the stablecoin could be exchanged for other digital currencies on PayPal. The platform hinted that the stablecoin would be initially used in the crypto and web3 sectors prior to its wider adoption. Schulman further stated, “The vision over time is that this becomes a part of the overall payments infrastructure”.