PayPal USD Stablecoin Goes Live
Posted on 08/07/2023
PayPal controls 44% of the world’s payment service market, and it wants to get in on the crypto universe with a new dollar stablecoin. The stablecoin will be backed by cash reserves and treasuries. Some say this will create more space for cryptocurrencies to be used in payments.
Per PayPal: “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, PayPal USD.” PayPal will not be earning fees from PYUSD: “There are no fees to buy, sell, hold or transfer PYUSD to eligible US PayPal Balance accounts. There is a fee to convert between PYUSD and other cryptos.”
Questions have arisen about the impact on Tether, the leading stablecoin currently. Tether is confident in its place in the market, since it is endorsed by several crypto companies, but PayPal may single-handedly disrupt the space. According to Tether: “Tether tokens are the most widely adopted stablecoins, having pioneered the concept in the digital token space.”
PayPal suffered significantly as management supposed that the online sales boom of 2020-21 would continue. When it didn’t PayPal failed to satisfy the market. The share price rose to as high as US$ 308 in 2021. Now PayPal is trading for the same nominal price as it did in 2017.
PayPal stock rose on the announcement of PYUSD to US$ 64.42.
