After more than a year of speculation, the payments behemoth has finally launched its dollar-backed stablecoin.
PayPal is releasing a new stablecoin backed by the US dollar. On Monday morning, the American payments behemoth released a statement outlining the stablecoin that will be produced by Paxos Trust Co.
With the purchase of PayPal USD, clients will have the ability to send and receive the stablecoin through “compatible external wallets” and PayPal. They may also use PayPal USD to pay for products.
Starting on Monday, consumers of PayPal will be able to buy, transmit, convert, and finance purchases using the stablecoin.
With this announcement, a major US financial institution has become the first to issue a stablecoin. In early 2022, the project’s existence was verified by PayPal’s leadership. As of early 2021, PayPal customers were able to purchase, trade, and store key digital assets like bitcoin and ether thanks to the platform’s newly integrated cryptocurrency services.
As the stablecoin’s publisher, Paxos is responsible for issuing monthly Reserve Reports and “attestation of the value of PayPal USD reserve assets.” According to PayPal, its stablecoin would be “fully backed by U.S. dollar deposits, US Treasuries, and similar cash equivalents.”
‘PayPal USD is the most important leap forward for digital assets and the financial sector, and Paxos is thrilled to offer this innovative innovation,’ Paxos CEO Charles Cascarilla said in a statement.
PayPal USD is a digital asset that will be created on Ethereum as an ERC-20 token, making it a part of the blockchain.
Schulman has said that PayPal USD will be able to contribute to the expansion of digital payments because of the company’s “commitment to responsible innovation and compliance” and their history of providing innovative new experiences for its consumers.
The full potential of stablecoins cannot be realised without clear rules and strong consumer safeguards. That’s why, as House Financial Services Committee head Patrick McHenry put it, “it’s more important than ever” for Congress to pass legislation to ensure full regulation of digital assets, notably stablecoins.
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