PayPal: Why we launched the USD stablecoin PYUSD

Tonight, PayPal launched PayPal USD (PYUSD), a USD stablecoin for transfers and payments, issued by Paxos Trust Company and backed 100% by US dollar deposits, short-term U.S. Treasuries, and similar cash equivalents.

Starting today, PYUSD will be rolling out gradually over the coming weeks, and eligible US PayPal customers** who purchase PYUSD will be able to transfer PYUSD between PayPal and compatible external wallets; make peer-to-peer payments with PYUSD; select PYUSD at checkout; and convert PayPal-supported cryptocurrencies to and from PayPal USD. **

As Dan Schulman, president and CEO of PayPal, said, "The shift to digital currencies requires a stable tool that is both digitally native and easy to connect with fiat currencies such as the US dollar. 」

Bridging the gap between fiat and Web3 for consumers, merchants, and developers

PayPal USD will allow consumers, merchants, and developers to seamlessly connect fiat and digital currencies. PayPal says that as the only supported stablecoin within the PayPal network, PayPal USD leverages PayPal’s decades of experience in large-scale payments combined with the inherent efficiency, cost, and programmability of blockchain. In addition, as an ERC-20 token issued on the Ethereum blockchain, PayPal USD will be available to external developers, wallets, and the Web3 app community, as well as be easily adopted by exchanges, and will be deployed within the PayPal ecosystem to enhance the experience ecosystem.

PayPal USD is designed to reduce payment friction in a virtual environment, facilitate value transfers, remittances or international payments, and enable payment methods that flow directly to developers and creators.

In addition, PayPal USD will be compatible with the Web3 ecosystem from day one of launch and will soon be available on Venmo.

USD-denominated, redeemable, and transparent

PayPal USD is issued by Paxos Trust Company, a fully licensed, limited-purpose trust company and regulated by the New York State Department of Financial Services. In June 2022, PayPal received a BitLicense issued by NYDFS after being licensed under a conditional BitLicense.

PayPal USD’s reserves are fully backed by USD deposits, U.S. Treasuries, and similar cash equivalents, and PayPal USD can be bought or sold through PayPal for $1.00 per PayPal USD.

Beginning in September 2023, Paxos will publicly release the PayPal USD Monthly Reserve Report, and will also publish public third-party proof of the value of PayPal USD Reserve Assets. The assurance will be issued by an independent third-party accounting firm and will be conducted in accordance with the assurance standards set by the American Institute of Certified Public Accountants (AICPA).

Focus on the education, understanding, and adoption of digital currencies

In addition to creating products and services that increase the utility of digital currencies, PayPal is committed to improving consumer and merchant understanding of cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs), while working closely with regulators as the industry evolves. It is worth mentioning that in addition to offering PayPal USD to US account holders, PayPal currently offers customers the ability to buy, hold, sell, and transfer mainstream cryptocurrencies, as well as educational content to help users understand the relevant knowledge and risks.