Chris Curl,
Editor
Aug. 16, 2023
PayPal (NASDAQ: PYPL) introduced the PayPal USD (PYUSD) stablecoin earlier this month.
This new stablecoin is pegged to the U.S. dollar and will be issued by Paxos Trust Co., fully backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.
The PYUSD operates on the Ethereum blockchain and is designed to facilitate digital payments and Web3 applications. Initially, it will be accessible to customers within the United States.
PYUSD can be redeemed for U.S. dollars at any time, and users can exchange it for other cryptocurrencies available on the PayPal platform. It will also be transferable between PayPal and Venmo, with the company planning to integrate it as a payment method for various purchases.
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By launching this stablecoin, PayPal aims to strengthen its position as a prominent player in the cryptocurrency payment space. The company initiated its crypto payment journey in 2020, allowing users in the U.S. and the United Kingdom to buy, sell, and hold cryptocurrencies like Bitcoin, Ether, Bitcoin Cash, and Litecoin, as well as enabling payments in these assets.
PayPal's CEO, Dan Schulman, hopes that the new stablecoin will become an integral part of the overall payments infrastructure. The company first revealed its plan to launch a crypto stablecoin in January 2022 and expressed its commitment to collaborate with relevant regulators during the process.
Although several stablecoins exist in the crypto market, PayPal's PYUSD stands out as the first to be launched by a major payment processor. Charles Cascarilla, the CEO of Paxos, remarked that this launch validates the real-world potential of blockchain technology, hailing PayPal USD as a transformative product for digital assets and the financial industry.
The company acknowledges the evolving regulatory landscape surrounding stablecoins in the U.S., with a gradual progression towards more clarity. Thus, the demand for an alternative stablecoin option has arisen in the market.
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View PublicationsCurrently, the crypto stablecoin market has a total circulating supply of $126 billion, dominated by Tether's USDT (with an $86.5 billion market cap) and USD Coin issued by Circle (with a $26 billion market cap).
Paypal users will be able to transfer PYUSD between PayPal and compatible external wallets, engage in peer-to-peer payments, use PYUSD for purchases, and convert supported cryptocurrencies to and from PYUSD.
The scale of impact becomes evident when considering the massive user base of PayPal, encompassing approximately 420 million individuals.
While PayPal is far from a perfect company, the widespread adoption facilitated by them could play a pivotal role in enhancing awareness about self-custody, establishing best practices, and legitimizing the cryptocurrency realm.
Anticipating the next crypto bull market, PayPal stands as a potential catalyst for increased adoption. With its substantial user base from prominent Web2 applications, a credible stablecoin, extensive outreach, and respected enterprise status, the influx of billions of dollars from PayPal users into the realm of crypto becomes even more likely.
Crypto adoption is growing by the day.
Chris Curl
Editor, Daily Profit Cycle