PayPal is mainly known as a payment service provider. But now the company has also launched its own digital currency on the market with the PayPal USD stableocoin.
Already since the end of 2020, PayPal users can also buy and sell cryptocurrencies such as Bitcoin. Only a few months later, the payment service provider also introduced the possibility to pay with these monetary values.
Now the US company is venturing a step further again. With PayPal USD, the platform has launched its first own stablecoin on the market, according to an announcement by the company.
What is PayPal USD?
According to the company, the PayPal USD stablecoin is “100 per cent backed by US dollar deposits, short-term US Treasuries and similar cash equivalents”. Users can exchange the stablecoin issued by Paxos Trust Company 1:1 for US dollars.
“The shift to digital currencies requires a stable instrument that is both digitally native and easily linked to fiat currencies like the US dollar,” explains PayPal CEO Dan Schulman.
Our commitment to responsible innovation and compliance, and our track record of delivering new experiences for our customers, provide the foundation to help grow digital payments with PayPal USD.
Here’s what you can do with Stablecoin
PayPal wants to create a seamless connection between digital currencies and fiat currencies like the US dollar with its Stablecoin. PayPal wants to make the token available to consumers, merchants and developers.
PayPal USD will initially be launched for authorised PayPal customers in the USA. Various functions will then be available to them.
Authorised users will be able to make payments with PayPal USD in the future. This applies both to payments between individuals. But the stablecoin will also be available for payments of purchases and the conversion of all cryptocurrencies supported by PayPal.
PayPal USD to build a bridge
According to the US company, it wants to build a “bridge between Fiat and Web3” with its Stablecoin. The company wants to make virtual payments easier and reduce friction.
It also wants to make it possible for users to transfer money more quickly and cheaply. But also “direct money flows to developers and creators” are to be simplified.