Payments giant PayPal has announced the launch of a proprietary stablecoin, PayPal USD (PYUSD), a significant move into cryptocurrencies for the firm. PYUSD will be pegged to the U.S. dollar and is expected to be integrated across PayPal’s services, starting with peer-to-peer crypto trading on its Venmo app.
PayPal joins a growing list of companies developing their own stablecoins as blockchain technology advances into mainstream finance. Stablecoins maintain their value through asset collateralization rather than market pricing, offering refuge from the volatility of normal cryptocurrencies like Bitcoin.
PYUSD will be fully backed by PayPal’s reserves to preserve the dollar peg. This allows transferring value on the blockchain while avoiding wild fluctuations. PayPal plans to issue the stablecoin on its PayPal network.
PYU Integration with Venmo App
Integrating PYU into its Venmo app will streamline settling crypto trades between users. Rather than cashing out to fiat that requires bank waits, Venmo can utilize PYU for faster and smoother transactions. PYU offers convenience without leaving the PayPal ecosystem.
Venmo account holders gain access to PYUSD as part of the app’s existing crypto features. They can purchase PYUSD similarly to major cryptocurrencies Bitcoin, Ethereum, Litecoin, and Bitcoin Cash already offered. PayPal plans additional functionality allowing Venmo users to pay merchants with PYUSD.
While PayPal already provides limited crypto buying and selling, PYUSD paves the way to expand web3 services such as potentially paying bills or shopping with stablecoin functionality. Enhanced offerings could give PayPal an edge over traditional banks in attracting customers.
PayPal confirmed it is actively exploring PYUSD for other potential use cases beyond Venmo and seeking applicable licenses and registrations. If adoption gains traction, PayPal could help push stablecoins toward mainstream viability as an alternative to traditional payments.
The development highlights PayPal’s ongoing evolution from an online payment processor to broader financial services. Launching its own stablecoin inches PayPal deeper into the digital asset space with blockchain-based offerings squarely in its sights.
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