To enhance the use of digital currencies for transactions and transfers, PayPal introduced a U.S. dollar stablecoin on Monday.
The company has confirmed that the stablecoin, named PayPal USD, is supported by U.S. dollar deposits and short-term U.S. Treasuries, and Paxos Trust Co will issue it.
PayPal’s shares increased by 1.4% and reached $63.66.
Today, we’re unveiling a new stablecoin, PayPal USD (PYUSD). It’s designed for payments and is backed by highly liquid and secure assets. Starting today and rolling out in the next few weeks, you’ll be able to buy, sell, hold and transfer PYUSD. Learn more https://t.co/53RRBhmNHx pic.twitter.com/53ur2KmjU7
— PayPal (@PayPal) August 7, 2023
According to Reuters, stablecoins are cryptocurrencies crafted to avoid the extreme volatility that hinders their use for payments and value storage.
PayPal USD is tied to the U.S. dollar and will roll out gradually to the company’s U.S. customers. Last month, a U.S. congressional committee couldn’t agree on a bill to establish federal regulations for stablecoins.
In 2021, Visa said it would permit the use of the cryptocurrency USD Coin for transaction settlements on its payment network.
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