PayPal USD is a stablecoin designed to enhance payment opportunities. It’s fully backed by US dollar deposits and comparable assets like short-term US Treasuries. It can be exchanged 1:1 for US dollars and is issued by Paxos Trust Company.
Starting today and over the next few weeks, eligible US PayPal users purchasing PayPal USD can transfer it between accounts, make person-to-person payments with PYUSD, use it for checkout purchases, and convert supported PayPal cryptocurrencies to or from PayPal USD.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” said Dan Schulman, president and chief executive officer of PayPal.
“Our commitment to responsible innovation and compliance and our track record of delivering new experiences to our customers provide the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
Creating a Bridge for Developers, Merchants, and Customers Between Fiat and Web3
PayPal USD is ushering in a new era of seamless connectivity between traditional fiat currency and the world of digital currencies, catering to consumers, merchants, and developers alike.
As the sole stablecoin supported within the PayPal network, PayPal USD leverages PayPal’s extensive experience in large-scale payments, coupling it with the speed, cost-effectiveness, and programmability inherent in blockchain protocols.
This innovative offering takes the form of an ERC-20 token running on the Ethereum blockchain, extending its accessibility to an expansive and ever-growing community of external developers, wallets, and web3 applications. This adaptability extends to exchanges while also empowering various experiences within the PayPal ecosystem.
The core aim of PayPal USD is to simplify payments within virtual settings, facilitate rapid value transfers to assist friends and family, enable remittances and cross-border transactions, streamline flows to developers and creators, and encourage the broader integration of digital assets by renowned global brands.
Recognizing the prevalence of stablecoins within web3 environments, PayPal USD has been fully compatible with this ecosystem since its launch and will soon be accessible on Venmo.
Denominated in US Dollars, Transparent, and Redeemable
The issuance of PayPal USD is under the purview of Paxos Trust Company, a duly licensed limited-purpose trust company subject to regulatory oversight from the New York State Department of Financial Services. Having secured a BitLicense from NYDFS in June 2022, PayPal has taken notable steps toward regulatory compliance.
Reserves underpinning PayPal USD are robustly backed by US dollar deposits, U.S. Treasury bills, and akin cash equivalents. This stability is evident in the straightforward exchange rate of $1.00 for each PayPal USD unit.
Beginning September 2023, Paxos commits to publishing a monthly public Reserve Report detailing the reserve composition for PayPal USD.
Furthermore, a third-party accounting firm, following guidelines established by the American Institute of Certified Public Accountants (AICPA), will provide an independent attestation of the value of PayPal’s USD reserve assets.
Concentrate on Education, Understanding, and adoption.
In tandem with developing products that bolster the utility of digital currencies, PayPal places significant emphasis on increasing understanding and acceptance of cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs).
This includes close collaboration with regulators to navigate the evolving landscape of the industry. Beyond introducing PayPal USD to U.S. account holders, PayPal empowers customers to buy, hold, sell, and transfer select cryptocurrencies. Educational resources are provided to help users grasp both the opportunities and risks associated with this transformative technology.