2023-08-14 19:11:16
PayPal, one of the most famous payment companies, has announced the launch of its own dollar-pegged cryptocurrency, PayPal USD (PYUSD). The stablecoin is issued by Paxos, which is the issuer and custodian of the reserves, and backed by dollar deposits, short-term US Treasury notes and other highly liquid “cash” equivalent assets.
According to the company, the crypto asset will gradually be available to PayPal customers in the US. There is still no information about the launch in other markets, such as Brazil.
“Our commitment to responsible innovation and compliance, and our track record of delivering new experiences to our customers, provide the foundation needed to contribute to the growth of digital payments through PayPal USD,” said Dan Schulman, president of PayPal, in note.
Customers will be able to buy, sell and transfer PayPal USD directly through the company’s app or website. “Send to friends in the US on PayPal with no fees. Or send to Ethereum wallet addresses that accept PYUSD in just a few steps. Network fees may apply,” says the company.
Also, the customer can use the conversion feature to buy other cryptocurrencies that PayPal supports.
Services with Paypal USD
It is worth noting that PYUSD is the only stablecoin supported by the PayPal network. According to the announcement, users will be able to perform the following services:
- Buying and selling PayPal USD on the app or website;
- Conversion feature to buy other cryptocurrencies that PayPal supports;
- Transfer PayPal USD (PYUSD) between supported external wallets and within PayPal;
- Send direct payments using PYUSD;
- Financing purchases with crypto.
“PayPal USD is the most significant leap forward for digital assets and the financial sector, and Paxos is proud to make this transformative product possible,” commented Charles Cascarilla, Founder and CEO of Paxos.
Are there fees for using PayPal USD?
According to PayPal, there are no fees for PYUSD transactions to US company accounts. However, there is a fee to convert between PayPal USD and other cryptocurrencies.
What is a stablecoin?
A stablecoin is a type of cryptocurrency designed to maintain a stable value against some reference asset, for example the US dollar. Thus, the main feature of stablecoins is to avoid the extreme volatility associated with many other cryptocurrencies such as Bitcoin and Ethereum.
Stablecoins have gained popularity due to their ability to provide a less volatile alternative for value transfers and financial transactions within the cryptocurrency ecosystem.
PayPal Cryptocurrency Hub
After announcing the launch of its own cryptocurrency, PayPal will have a digital asset trading platform, according to information from CoinInsider. At the moment, the service will only be available to selected users.
The novelty is contained in the terms and conditions of the payment company. According to the terms, the “Cryptocurrencies Hub”, or “Polo de Cryptomoedas” in Portuguese, will allow the trading of cryptocurrencies such as the recently launched PYUSD and bitcoin directly from the PayPal account.
With the cryptocurrency hub, customers will be able to buy, sell and store cryptocurrencies in their PayPal wallet. In addition, it will facilitate the payment of purchases via PayPal using the money stored after the cryptocurrency sale.
“Any balance in your Cryptocurrency Hub represents your ownership of the value of each cryptocurrency shown. You will not have the digital assets themselves in your crypto balance”, clarifies PayPal.
According to the company, “you can only use the Cryptocurrency Hub as part of your Balance Account by accessing it through your personal PayPal account. If you are a resident of Hawaii, the company will not allow you to use the Cryptocurrency Hub right now.”
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