PayPal Holdings Inc., the California-based online payments giant, announced Monday that it is launching an Ethereum blockchain-based stablecoin pegged to the U.S. dollar. PayPal, which reported US$7.3 billion in second quarter revenue, said its fully-backed, regulated stablecoin can bridge the gap between fiat currencies and the blockchain for consumers, merchants and developers.
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Fast facts
The newly launched stablecoin, PayPal USD (PYUSD), is backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents, according to PayPal.
Customers who purchase PayPal USD will be able to transfer the stablecoin to compatible external wallets, pay other customers and purchase foreign currencies using the stablecoin.
PayPal USD, issued by Paxos Trust Company, is redeemable using the U.S. dollar. Users can also convert the token into different cryptocurrencies supported by PayPal.
A PayPal news release said the ERC-20 stablecoin will be “rolling out in the coming weeks” for U.S. customers. It will then become available on Venmo, the peer-to-peer payment application owned by PayPal, at an unspecified later date.
“PayPal’s news today is a testament to the burgeoning popularity of DeFi,” said Tony Petrov, the chief legal officer of Cyprus-based online verification platform Sumsub. “This rapid ascent signals a major transformation in the cryptocurrency ecosystem, and the potential impact of stablecoins on the global financial landscape is an exciting development to monitor closely.”
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