PayPal launches ERC20 stablecoin ‘PYUSD’ with Paxos
PayPal has announced the debut of its US dollar-backed stablecoin, PayPal USD (PYUSD), signaling a significant shift towards digital currencies.
This initiative, which was disclosed directly by PayPal, adds a new dimension to the increasing promise of regulated, fully-backed stablecoins in revolutionizing payments in digitally native contexts such as web3. The announcement comes after the project’s work was thought to have halted in February. “We are exploring a stablecoin,” a business official told Bloomberg at the time. If and when we decide to proceed, we will, of course, collaborate extensively with relevant regulators.”
What is PYUSD? PayPal USD
PYUSD is fully guaranteed by US dollar deposits, US Treasury bills, and comparable cash equivalents, allowing for a one-to-one redemption for US dollars. Furthermore, the corporation indicated that the stablecoin will be offered to consumers in the United States.
Furthermore, according to the parameters specified in the statement, PYUSD looks to be the native token of PayPal’s crypto business, with no “spread” imposed on exchanges. “When you buy or sell cryptocurrency, including when you pay with cryptocurrency, we will disclose an exchange rate and any fees associated with that transaction.” PYUSD is fully guaranteed by US dollar deposits, US Treasury bills, and comparable cash equivalents, allowing for a one-to-one redemption for US dollars. Furthermore, the corporation indicated that the stablecoin will be offered to consumers in the United States.
Furthermore, according to the parameters specified in the statement, PYUSD looks to be the native token of PayPal’s crypto business, with no “spread” imposed on exchanges. “When you buy or sell cryptocurrency, including when you pay with cryptocurrency, we will disclose an exchange rate and any fees associated with that transaction.” The exchange rate for currencies other than PayPal USD includes a spread that PayPal earns on each buy and sale. In Hawaii, PayPal USD is not available.”
Recognizing the need for a stable, digitally native instrument that can be easily linked to fiat currency, PayPal President and CEO Dan Schulman stated the company’s commitment to innovation and compliance, saying, “Our track record of delivering new experiences to our customers provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.” PayPal USD, as an ERC-20 token on the Ethereum blockchain, promises to bridge the gap between fiat and digital currencies for customers, merchants, and developers.
The new stablecoin is planned to enable quick value transfers, direct payments to developers and producers, and assist major companies’ continuous expansion into digital assets. Furthermore, PayPal USD will be compatible with web3-specific setups, with plans for Venmo availability in the near future.
PYUSD issuance and transparency
Paxos Trust business, a fully licensed limited-purpose trust business subject to regulatory control by the New York State Department of Financial Services, oversees the issuing of PayPal USD. This regulatory control assures that PayPal USD reserves are adequately supported and that the stablecoin can be purchased or sold via PayPal at a rate of $1.00 per PYUSD. Beginning in September 2023, Paxos wants to increase openness by providing a public monthly Reserve Report for PayPal USD describing the instruments that comprise the reserves.
This report will be supplemented by a public third-party attestation of the value of PayPal USD reserve assets produced by an independent accounting firm in accordance with the American Institute of Certified Public Accountants (AICPA) guidelines. Aside from providing a variety of services that enhance the utility of digital currencies, the company stated that it is committed to increasing consumer and merchant understanding of cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), as well as actively engaging with regulators as the industry evolves.
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