American fintech company PayPal launched a new crypto stablecoin called PayPal Dollar (PYUSD) on August 7.
The new dollar-backed stablecoin will be issued by Paxos Trust Co. and fully backed by U.S. dollar deposits, short-term Treasury bills and similar cash equivalents. The new stablecoin is built on Ethereum and is "designed for digital payments and Web3." The company said the new stablecoin will be available to U.S. customers soon.
PYUSD can be exchanged for U.S. dollars at any time, as well as for other cryptocurrencies at PayPal. The payment processor claims that the new stablecoin will soon be available as a payment method for purchases and can be transferred between PayPal and Venmo.
The launch of the stablecoin could propel the company to become a crypto payments giant, a debate the company began in 2020 after making way for crypto payments on its platform.
PayPal has more than 350 million active users and already allows users in the United States and the United Kingdom to buy, sell and hold Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC), while supporting payments in these crypto assets.
PayPal CEO Dan Schulman hopes that the new stablecoin can become part of the overall payment infrastructure. The company first confirmed its plans to launch a crypto stablecoin in January 2022, claiming that it would develop the stablecoin while working closely with relevant regulators.
While there are multiple stablecoins in the crypto market, PayPal will be the first stablecoin launched by the payment processing giant. Paxos CEO Charles Cascarilla told Cointelegraph:
“With the launch of the first stablecoin by a leading financial institution, PayPal and Paxos are demonstrating the real-world value of blockchain technology. The PayPal dollar is the most significant leap forward for digital assets and finance, and Paxos is proud to have enabled this transformative product.”
The firm claims that the regulatory environment for stablecoins in the United States is gradually “moving toward greater clarity,” hence the demand for alternative stablecoins currently available in the market.
Related: U.S. Treasury says must 'modernize and adapt' digital currencies
The crypto stablecoin market has a circulating supply of $126 billion, with USDT issued by Tether dominating with a market cap of $86.5 billion, followed by USD Coin (USDC) issued by Circle with a market cap of $26 billion, and a few others. However, most of these stablecoins have recently faced regulatory hurdles in the United States. U.S. policymakers are currently discussing a bipartisan stablecoin bill.
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