PYUSD: PayPal's Dollar-Pegged Stablecoin
PayPal has become the very first major (giant) financial player or payment processor company to launch its very own stablecoin, PayPal USD (PYUSD). This goes to show its seriousness in making crypto accessible to its millions of users.
Sometime in early 2022, there was a piece of news that PayPal confirmed it was looking into stablecoin and that they would call it PayPal Coin. And it looks like it had been silently developing one since.
PayPal USD (PYUSD) is an ERC-20 token issued by Paxos Trust, "a licensed limited purpose trust company subject to regulatory oversight by the New York State Department of Financial Services. The stablecoin is fully backed by secure and highly liquid assets, re: US dollar deposits, short-term U.S. treasuries, and other similar cash equivalents, and can be redeemed 1:1 for U.S. dollars."¹
What can you do with PYUSD
PYUSD is initially available for purchase by eligible US PayPal customers for payments, checkouts, transfers, and conversions.²
Buy or sell PYUSD
Eligible users can easily purchase or sell the stablecoin on the app or on PayPal's website at the rate of 1 USD = 1 PYUSD.
Transfer funds between PayPal and external wallet addresses.
Users can transfer PYUSD to other PayPal accounts and compatible Ethereum wallet addresses through the app or on the website.
PayPal account balance is however required for one to be able to perform this transaction.
Send or Receive payments
One can send (or receive) funds using the stablecoin as payments to or from other PayPal accounts. Zero fees when sending to US customers.
Pay purchases on Checkout
As we already know, PayPal is one of the major digital payment gateways for online shopping and PYUSD will be added as a form of payment in the network.
Users can now pay for their purchases using PYUSD.
Convert supported cryptocurrencies
Using the PayPal app or on the website, users can easily convert select crypto assets (BTC, ETH, LTC, BCH) to and from PayPal USD.
Furthermore, PYUSD will only be the stablecoin supported in the PayPal network and will be available to its consumers, merchants, and external developers which will enable them to seamlessly bridge or connect fiat and cryptocurrencies.³
The stablecoin is said to have been designed to be fully compatible with most-used exchanges, Web3 applications, or ecosystems and wallets.
PYUSD is pegged to the US Dollar which means 1 PYUSD can be purchased or exchanged with 1 USD.
PYUSD Reserves Transparency Reports
PayPal intends to be transparent on its stablecoin backing or reserves and will be publishing monthly reports which will be available publicly starting next month (September).
In addition, Paxos will also publish a public attestation report of the value of PYUSD reserve assets. Such "attestation will be issued by an independent third-party accounting firm and conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA)."⁴
It is worth noting that "in June 2022, PayPal was issued a BitLicense by NYDFS after previously obtaining a conditional BitLicense."⁵
It currently allows its US and UK customers to be able to buy, sell, transfer, or hold select cryptocurrencies like Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litcoin (LTC).
Personal Thoughts
PayPal has further strengthened its stance in supporting technology, innovation, and cryptocurrencies with this release of its own stablecoin, PYUSD. It is issued to be regulatory-compliant and accordingly, will operate within the framework of existing regulations through Paxos. It is nice that they plan to issue monthly public reports on the stablecoin's reserves so users and even regulators have access to them.
PYUSD can be bought or sold on PayPal's app or website, can also be transferred between users, utilized to pay for online purchases, can be converted into supported crypto.
Whilst the stablecoin may foster seamless, faster transactions and introduce another way for users to buy, sell, transfer, or hold crypto through their PayPal accounts and supported wallets, I think there are certain risks involved. First, PayPal is centralized, it's KYC'd and it is known to freeze or suspend user's account so one must exercise discretion when using the service.
For infotainment only. Info Sources: Paypal / Press Release / Coindesk
Lead image edited on Canva. Photo/s from Wiki Commons. Screenshots directly linked to source. No copyright infringement intended. 08082023/10:30ph Posted Using LeoFinance Alpha
You wouldn't believe that I just read about this from another author not quite long and then seeing you write about it, makes me wanna be interested in this.
I hope I get to understand the crypto world very soon.
Yeah. I noticed there have been some posts about it :)
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Wow once Paypal gets in the game, the game is going mainstream. Anyone familiar with Paypal will be comfortable investing in their stablecoin! !WINE
Let's see how PayPal's users will receive this news and the stablecoin too.
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I think Paypal stablecoin is one of the most awaited ones, especially for the Paypal user. This one is looking promising and the fundamental base is also strong as it is issued by Paxos. I think it will be more popular in the upcoming days.
We will see how it will be received by its users, Inti. People may get excited about it.
!PIZZA
I am very positive about it.
Once i also try to use PayPal but than i know that it's not allow to use in our country 😒
Sorry to hear but I think it's good that it's not allowed in your country. It can be a pain in the arse when your account gets suspended.
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I heard about this in BitPinas on FB yesterday. Whenever I hear about news like this, the first thing that comes to my mind is, "What blockchain are they going to use?".
Seeing that it's Ethereum automatically made me lose interest, well, at least for now. IMO, this should be a Polygon job, considering gas fees on Ethereum could make this service costly to use.
But then it wouldn't really matter to us Filipinos anyway, as it's for US and UK users only at this time. Let's wait and see.
The transaction cost on Ethereum is definitely a turn off. And like you said, it wouldn't really matter :) I personally have ceased using PayPal for a long while.😊
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Oi . Bago to? I still hesitating to use paypal in doing transactions for some reasons...
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Oo sis, kakalaunch lang nila sa stablecoin nila. Tagal ko na din d ginagamit yung app. Didn't even check if I still have funds on it, lol!
While the stablecoin could certainly enhance the convenience of transactions and crypto-related activities within PayPal's ecosystem, it's crucial for users to stay informed and make informed decisions while considering their individual risk tolerance. Overall, it's an intriguing development in the crypto space, and I'm curious to see how it unfolds in the future.
That is very true. One must be weigh the associated risks before using the service. Let's see how it goes from here.
!PIZZA
Had not heard about it yet… but maybe because my PayPal is Dutch is the reason.
Hope they will add more countries. So all can benefit.
Have a great day @ifarmgirl 👋🏻😊 thanks for sharing.
Yeah, they said it is available only to US users so maybe in the near future, they will include other countries. Thank you too, Jackie. Have a beautiful Tuesday.
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Maybe they will… we will find out.
You are welcome @ifarmgirl 👋🏻😊 thanks a lot.
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I'm not that much into stablecoins and I'm definitely not a big Paypal fan either, but this could be a huge step toward crypto adoption... Also, I doubt that those internal transactions between users will be stored in the blockchain for free... But, it is a start...
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It is quite interesting how they go about it. And true, considering it is an ERC-20, transaction cost is not a joke. Imagine having millions or even thousands of users transacting, the fees would be enormous.
Thank you so much for including it on your picks. I appreciate it :)
That is good for them now that they have a stable coin
It really makes sense but the problem is that a lot of people are complaining about PayPal over their accounts suspension
It is becoming too much...
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Wala pa naman PayPal crypto sa tin pero hindi na kailangan. Hehe
Yep. No need hehe. At least we got other channels.
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It's good for the people who used it and the progress like that is good for the people using the app and we're seeing that very much and globally. If it is famous, then people have a special need for it.
Great to see positive crypto adoption but another stablecoin just doesn’t make any sense.
It seems everyone wants to have their own😅
I have been impressed by the quantity and quality of the information you have shared on this very new and complex topic. You have clearly and accurately explained the technical, legal and economic aspects surrounding the PYUSD, as well as the sources and data that support your analysis. I also found interesting the approach to the advantages and challenges that the PYUSD would bring to the cryptocurrency market and to the users, both globally and locally. Thank you very much my friend!