PayPal launches stablecoin tied to the US dollar, issued on Ethereum
The launch comes more than a year after the payments giant first confirmed the existence of the dollar-backed stablecoin project
Tero Vesalainen/Shutterstock modified by Blockworks
PayPal is rolling out a new dollar-backed stablecoin.
The stablecoin, issued by Paxos Trust Co, was detailed in a statement published Monday morning by the American payments giant.
PayPal announced that customers who purchase PayPal USD will be able to transfer the stablecoin between “compatible external wallets” and PayPal. They will also be able to fund purchases with PayPal USD.
The stablecoin will be available starting Monday, and PayPal customers will be able to purchase, send, convert and fund purchases in the “coming weeks.”
The announcement marks the first time that a major US financial company has created a stablecoin. PayPal’s leadership confirmed the existence of the project in early 2022. PayPal began integrating crypto services in early 2021, allowing users to buy, sell and hold major digital assets like bitcoin and ether.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” said Dan Schulman, PayPal’s president and CEO.
Paxos will be in charge of publishing a monthly Reserve Report on the stablecoin, as well as an “attestation of the value of PayPal USD reserve assets.” PayPal said the stablecoin will be “fully backed by U.S. dollar deposits, US Treasuries and similar cash equivalents.”
“PayPal USD is the most significant leap forward for digital assets and the financial industry and Paxos is proud to enable this transformative product,” Paxos CEO Charles Cascarilla said in a statement.
A blockchain-based digital asset, PayPal USD will be issued on Ethereum as an ERC-20 token.
“Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD,” said Schulman.
“Clear regulations and robust consumer protections are essential to enabling stablecoins to achieve their full potential. That’s why it’s more important than ever that Congress enact legislation to provide comprehensive digital asset regulation, especially for stablecoins,” chair of the House Financial Services Committee Patrick McHenry said in a statement.
This announcement comes a few months after PayPal enabled crypto purchases for Venmo users.
Updated Aug. 7, 2023 at 11:40 am ET: Added statement from House Financial Services Committee Chair Patrick McHenry.
Updated Aug. 7, 2023 at 9:45 am ET: Added statement from Paxos CEO Charles Cascarilla.
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