Post Your Comment
PayPal's stablecoin PYUSD arrives on Venmo
Paypal USD serves as a bridge between the traditional fiat currency and web3 ecosystem and has quickly reached a market capitalization of $44.3 million
Image: Shutterstock
The US based financial payments giant PayPal has rolled out Paypal USD (PYUSD), which is available to users on Venmo, a peer-to-peer payments platform owned by PayPal. This comes nearly a month after their announcement to launch a stablecoin.
PYUSD is issued by the Paxos Trust Company and is fully backed by US dollar deposits, short-term US Treasuries, and similar cash equivalents. The users can exchange their PYUSD for US dollars or vice versa at a fixed rate of 1:1. This ensures that PYUSD maintains a stable value similar to the US dollar.
This feature is currently available to select users and will be gradually rolled out to more customers in the coming weeks. The users can effortlessly transfer PYUSD between their PayPal accounts and compatible external digital wallets. They can send person-to-person payments using PYUSD.
When making purchases, users can select PayPal USD as their preferred payment method at checkout, adding flexibility to their transactions. Furthermore, they can convert any of PayPal's supported crypto to and from PYUSD.
PayPal seeks to reduce friction in everyday payments by leveraging PYUSD. This includes improving transaction speed and lowering costs associated with cross-border or digital payments. The stablecoin can facilitate faster and cheaper transactions compared to traditional payment methods.
PYUSD aims to connect the traditional fiat currency with the web3 ecosystem. Through PYUSD, PayPal and Venmo provide a seamless way for users to engage with web3 applications and services while still using a stable, regulated digital currency.
PYUSD has already become a part of the native cryptocurrency experience and is becoming more widely available as the ecosystem expands. Within a few weeks of its release on the open market, PYUSD has been listed on select exchanges such as Crypto.com, Bitstamp, Coinbase, and Kraken.
It is also available on popular wallets like MetaMask, Ledger, and Phantom and is supported by custodians and institutional service providers such as Fireblocks, Copper, Paxos, and Fordefi. PYUSD is also accepted by crypto payment service providers like Bitpay. This broad adoption increases its utility and accessibility.
In addition to becoming more accessible and widely distributed in its initial weeks, PayPal USD has been approved by the New York State Department of Financial Services, making it easier for virtual currency entities licensed in New York to support PYUSD.
PYUSD now must navigate potential challenges in the stablecoin space, including regulatory scrutiny, security considerations, and market volatility. Stablecoins like PYUSD often encounter regulatory scrutiny, and any changes in policies can significantly impact their operations and adoption. Ensuring the security of stablecoin reserves and custodial solutions is crucial to maintaining user trust. Furthermore, the stablecoin's stability can be challenged by unexpected market fluctuations.
In terms of competition, PYUSD faces established players like Tether (USDT) and USD Coin (USDC) while also contending with the potential impact of central bank digital currencies (CBDCs) on the demand for privately issued stablecoins. Innovation remains a driving force in this dynamic space, with new entrants and creative solutions continually emerging.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
My losses have taught me the most: Lovlina Borgohain
Uniswap collaborates with DoDAO to boost blockchain education
