- Name: PayPal USD (PYUSD)
- Backing: 100% backed by U.S. dollar deposits, short-term U.S. Treasuries, and similar cash equivalents.
- Issuer: Paxos Trust Company
- Blockchain: Ethereum
- Can be bought, sold, held, and transferred on PayPal.
- Can be sent to friends and family in the U.S. on PayPal without fees.
- Can be used to pay for goods and services on PayPal.
- Can be used to buy and sell other cryptocurrencies on PayPal.
- Availability: Gradually rolling out to U.S. customers starting August 7, 2023.
The PayPal stablecoin is the first stablecoin to be issued by a major financial technology firm, and it could pave the way for other major companies to offer their own stablecoins. This could make cryptocurrency more accessible and user-friendly for a wider range of people, and it could help to drive mainstream adoption of digital assets.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” said Dan Schulman, president and CEO of PayPal in a statement.
However, there have been serious criticisms of the idea.
PashovKrum wrote on Twitter, “The new Paypal USD stablecoin has an “assetProtection” role which can wipe your balance in two transactions (first `freeze`, then `wipeFrozenAddress`) In smart contract security we call this a “centralisation attack vector”.
PayPal USD is designed to provide a more stable and secure way to use cryptocurrency for payments and transfers. The fact that PayPal is backing PYUSD with U.S. dollar reserves means it could be more attractive to businesses and consumers who are looking for a way to use cryptocurrency without the volatility of other digital currencies.
PYUSD also offers a number of other features that make it a compelling option for users of PayPal. For example, it can be used to send payments to friends and family in the U.S. without fees. This could be a major advantage for people who frequently send money to friends and family who live in different parts of the country. PYUSD can also be used to pay for goods and services on PayPal. This could make it a more convenient option for people who want to use cryptocurrency to make purchases online.
Overall, PYUSD has the potential to make cryptocurrency more accessible and user-friendly for a wider range of people. It is still too early to say how popular PYUSD will become, but it is certainly a development to watch.
“This announcement is a clear signal that stablecoins – if issued under a clear regulatory framework – hold promise as a pillar of our 21st century payments system,” commented U.S. House Committee on Financial Services Patrick McHenry.
Here are some additional details about the PayPal stablecoin:
- The name “PayPal USD” reflects the fact that the stablecoin is fully backed by U.S. dollars. This means that for every PYUSD token that is created, there is one U.S. dollar held in reserve. This gives PYUSD a high degree of stability and makes it a more attractive option for businesses and consumers who are looking for a way to use cryptocurrency without the volatility of other digital currencies.
- The stablecoin is issued by Paxos Trust Company, a regulated financial institution that specializes in digital assets. This gives PYUSD an additional layer of security and trust.
- The stablecoin is built on the Ethereum blockchain, which is one of the most popular and secure blockchains in the world. This ensures that PYUSD transactions are secure and transparent.
- PayPal is gradually rolling out PYUSD to U.S. customers starting on August 7, 2023. It is expected to be available to all U.S. customers by the end of 2023.