Payment service PayPal has launched its own stable cryptocurrency tied to the U.S. dollar - the digital asset is backed by cash deposits, short-term Treasury bonds, and other cash equivalents. Eventually, the stablecoin will be available to all PayPal users from the United States.
PayPal USD (PYUSD) is being issued by the cryptocurrency company Paxos Trust. The stablecoin can be exchanged for dollars or other cryptocurrencies available on the PayPal network at any time. The digital asset will also be able to be used as a means of payment; it will soon appear in the popular PayPal Venmo payment app, as well as in third-party cryptocurrency wallets outside the PayPal network.
The payment service PayPal, which now has more than 431 million users worldwide, began introducing cryptocurrencies in 2020: their purchase and sale, as well as making payments, are available on the platform. The administration of the service assumes that the PYUSD token will initially be used in the cryptocurrency sector and web3-applications for trading digital assets and in-game transactions, and then will gradually spread as a means for money transfers and micropayments.
Cryptocurrency experts have long asserted that stablecoins are the best means for low-cost instant money transfers and payments. But the spread of these assets is hindered by central banks busy issuing official digital currencies, as well as failures of private cryptocurrency projects, the largest of which was the collapse of the pair of Luna and TerraUSD last May. In February, the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing the BUSD stablecoin to the cryptocurrency exchange Binance.
PYUSD apparently won't be threatened by this: PayPal has obtained a cryptocurrency project license in New York State, and the stablecoin will be a regulated product. Starting in September, Paxos will begin publishing monthly reports detailing the assets backing PYUSD.
