PayPal Holdings Inc., the California-based online payments giant, announced Monday that it is launching an Ethereum blockchain-based stablecoin pegged to the U.S. dollar. PayPal, which reported US$7.3 billion in second quarter revenue, said its fully-backed, regulated stablecoin can bridge the gap between fiat currencies and the blockchain for consumers, merchants and developers.
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- The newly launched stablecoin, PayPal USD (PYUSD), is backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents, according to PayPal.
- Customers who purchase PayPal USD will be able to transfer the stablecoin to compatible external wallets, pay other customers and purchase foreign currencies using the stablecoin.
- PayPal USD, issued by Paxos Trust Company, is redeemable using the U.S. dollar. Users can also convert the token into different cryptocurrencies supported by PayPal.
- A PayPal news release said the ERC-20 stablecoin will be “rolling out in the coming weeks” for U.S. customers. It will then become available on Venmo, the peer-to-peer payment application owned by PayPal, at an unspecified later date.
- “PayPal’s news today is a testament to the burgeoning popularity of DeFi,” said Tony Petrov, the chief legal officer of Cyprus-based online verification platform Sumsub. “This rapid ascent signals a major transformation in the cryptocurrency ecosystem, and the potential impact of stablecoins on the global financial landscape is an exciting development to monitor closely.”
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