PayPal – the world’s biggest digital payment platform – has announced the release of a new USD-pegged stable asset it’ll use to enter the digital currency market. PayPal is Delving Deeper into Crypto PayPal has had a strong background in crypto. A former executive with the firm – David Marcus – lent plenty of energy and time to aid Facebook’s failed Libra project, which would have seen a new stable currency payment outlet formed on the social media giant. Also, the company has been allowing people to store their assets on the platform, as well as buy bitcoin and assorted altcoins. The company is announcing that its new stable coin will be built atop the Ethereum network and available to PayPal users in the U.S. This marks the first time a major (mainstream)
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PayPal – the world’s biggest digital payment platform – has announced the release of a new USD-pegged stable asset it’ll use to enter the digital currency market.
PayPal is Delving Deeper into Crypto
PayPal has had a strong background in crypto. A former executive with the firm – David Marcus – lent plenty of energy and time to aid Facebook’s failed Libra project, which would have seen a new stable currency payment outlet formed on the social media giant. Also, the company has been allowing people to store their assets on the platform, as well as buy bitcoin and assorted altcoins.
The company is announcing that its new stable coin will be built atop the Ethereum network and available to PayPal users in the U.S. This marks the first time a major (mainstream) financial company will issue its own stable asset. Users can transfer their funds between PYUSD (the new wallet system for the token) and verified outside accounts. The currency can be utilized to pay for both goods and services through PayPal.
The firm’s representatives also said the token can be adopted by crypto exchanges everywhere and will be available to a “large and growing community of external developers, wallets, and web3 applications.” The token will also be issued through Paxos Trust in New York. It will be backed by U.S. dollar deposits, short-term Treasuries, and similar items. It can be exchanged for USD, as well as the many crypto assets offered through PayPal including BTC, ETH, and LTC.
The company’s CEO Dan Schulman explained in a recent interview:
The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar. Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.
The currency will first be available only on PayPal, though it will later be released through the company’s Venmo app. Representative Patrick McHenry, a Republican of North Carolina, commented that this represents a serious move forward in the growth of stable assets and in the idea of crypto as standard money. He said:
This announcement is a clear signal that stable coins, if issued under a clear regulatory framework, hold promise as a pillar of our 21st century payments system.
Ensuring All the Financials
In a separate release, PayPal said:
Beginning in September 2023, Paxos will publish a public monthly reserve report for PayPal USD that outlines the instruments composing the reserves. Paxos will also publish a public third-party attestation of the value of PayPal USD reserve assets. The 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.