A quick look at PayPal’s USD stablecoin PYUSD

Fully backed, regulated stablecoins have the potential to transform payments in web3 and digital native environments. In response to this emerging opportunity, PayPal (NASDAQ: PYPL) today announced the launch of PayPal USD (PYUSD), a U.S. dollar-denominated stablecoin.

PayPal USD aims to bring positive changes to the stablecoin payment space and is backed by 100% U.S. dollar deposits, short-term U.S. Treasury bills, and similar cash equivalents. PayPal USD is redeemable one-to-one with the U.S. dollar and is issued by Paxos Trust Company.

Starting today and rolling out over the coming weeks, eligible US PayPal customers purchasing PayPal USD will be able to:

• Transfer PayPal USD between PayPal and compatible external wallets

• Use PYUSD for person-to-person payments

• Choose to purchase using PayPal USD at checkout

• Convert any cryptocurrency supported by PayPal to PayPal USD and vice versa

“The shift to digital currencies requires a stable instrument that is both digitally native and easily connectable to fiat currencies like the U.S. dollar,” said Dan Schulman, president and CEO of PayPal. “Our commitment to responsible innovation and compliance, and our track record of delivering new experiences for our customers, provide the necessary foundation to drive growth in digital payments through PayPal USD.”

Build a bridge between fiat currency and Web3 for consumers, merchants and developers

PayPal USD will be available for consumers, merchants, and developers to seamlessly connect fiat and digital currencies. As the only stablecoin supported within the PayPal network, PayPal USD leverages PayPal's decades of experience in large-scale payments and combines it with the speed, cost, and programmability of blockchain protocols. As an ERC-20 token issued on the Ethereum blockchain, PayPal USD will be available to an already large and growing community of external developers, wallets, and web3 applications, can be easily adopted by exchanges, and will be deployed within the PayPal Enhanced Experiences ecosystem.

PayPal USD is designed to reduce friction for inexperienced payments in virtual environments, facilitate the rapid transfer of value to support friends and family, send remittances or make international payments, enable direct flows to developers and creators, and promote the continued expansion of digital assets by the world's largest brands. Most current stablecoins are used in a web3-specific environment - PayPal USD will be compatible with this ecosystem from day one and will soon be available on Venmo.

USD-denominated, redeemable, transparent

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

PayPal USD is fully backed by U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents, and PayPal USD may be bought and sold through PayPal at a price of $1.00 per PayPal USD.

Starting in September 2023, Paxos will publish public monthly reserve reports for PayPal USD, outlining the instruments that make up the reserve. Paxos will also publish public third-party attestations of the value of PayPal’s USD reserve assets. The attestation will be issued by an independent third-party accounting firm and conducted in accordance with the attestation standards established by the American Institute of Certified Public Accountants (AICPA).

Focused on 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 increasing consumer and merchant understanding of cryptocurrencies, stablecoins and central bank digital currencies (CBDCs), while working closely with regulators as the industry develops. In addition to offering PayPal USD to U.S. account holders, PayPal currently offers customers the ability to buy, hold, sell and transfer select cryptocurrencies, and provides educational content to help account holders understand the risks and possibilities of the technology.