PayPal shocks the financial world with the launch of a stablecoin.
PayPal, the global online payments company, has launched its own stablecoin, sending shockwaves through the cryptocurrency market.
PayPal’s debut is significant because it is the first major US financial company to launch a stablecoin, a digital currency backed by US dollar deposits and cash equivalents.
Also read: US regulators warn banks over cryptocurrency risks
The stablecoin, known as PayPal USD ($PYUSD), is designed to make PayPal’s platform transactions faster and more reliable.
PayPal shocks the financial world with the launch of a stablecoin, check the Tweet:
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 PYUSD. Learn more https://t.co/53RRBhmNHx pic.twitter.com/53ur2KmjU7
— PayPal (@PayPal) August 7, 2023
The PayPal USD, issued by Paxos Trust Company and based on the Ethereum blockchain, is intended to be a stable alternative to the volatile nature of traditional cryptocurrencies such as Bitcoin and Ether.
This move comes amid a period of uncertainty in the cryptocurrency industry, following the demise of FTX and legal battles involving key players.
PayPal hopes to bridge the gap between digital currencies and fiat currency with this stablecoin, providing users with a secure and easily accessible option for online transactions.
PayPal’s foray into the cryptocurrency world began in 2021 when it enabled users to buy, sell, and hold major digital assets. PayPal USD represents a more daring foray into the world of digital payments.
This new stablecoin is expected to not only improve transaction efficiency within PayPal’s ecosystem but also to set a precedent for other financial institutions to pursue similar ventures.
The introduction of PayPal USD has also sparked debate within regulatory circles. Patrick T. McHenry, Chair of the House Financial Services Committee, emphasized the need for a clear regulatory framework for stablecoins, emphasizing the potential promise they hold for modernizing the payments landscape.
Concerns have been raised, however, about potential loopholes that could allow tech titans such as Meta and Amazon to issue their own digital currencies under current legislation.
