In August 2023, PayPal announced the PYUSD stablecoin, which is fully backed by US dollar deposits, short-term US treasuries and similar cash equivalents, and can be redeemed 1:1 for US dollars. According to PayPal, this launch aimed to provide the market with a stable form of digital value designed to link fiat dollars to the web3 ecosystem while minimising friction from everyday payments, improving speed, and lowering costs.
At the time of writing, PYUSD is available on Venmo to select users, while a complete roll-out of the stablecoin on the mobile payment service is expected to occur in the following weeks. In essence, Venmo users gained the ability to purchase PYUSD and send it to friends and family on PayPal, Venmo, and compatible external wallets.
Individuals using compatible external wallets, as well as merchants accepting payments in PYUSD, will also be able to receive transfers from Venmo users. In this case, however, blockchain network fees will be applied. In the official release, PayPal emphasised that PYUSD is already present on select exchanges such as Crypto.com, Bitstamp, Coinbase, and Kraken. It also works with digital wallets such as MetaMask, Ledger and Phantom, and it integrates with custodians and institutional service providers like Fireblocks, Copper, Paxos and Fordefi.
In September 2023, US-based provider of Bitcoin and cryptocurrency payment services BitPay rolled out PayPal USD payments for merchants and consumers. Among the early adopters of this new feature is Xsolla, a company that allows its customers to make online purchases using PayPal’s stablecoin.
Officials from BitPay emphasised the importance of PYUSD's payment utility and community engagement. They talked about the process of adding a new cryptocurrency for merchants to accept and revealed the factors that this decision involves, including payment utility and community involvement. They also highlighted that supporting PYUSD encourages mass adoption of cryptocurrency payments from PayPal's customer base.
In the same month, PayPal introduced On and Off-Ramps to support Web3 payments and improve access to digital currencies. In essence, PayPal aimed to simplify how wallets, dApps, and NFT marketplaces allow their customers to buy and sell supported cryptocurrencies in the US through integration with PayPal On and Off Ramps. On-Ramp can help users accumulate cryptocurrencies in their wallets, while Off-Ramp provides access to a conversion tool for changing crypto to USD.
For more information about PayPal, please check out their detailed profile in our dedicated, industry-specific Company Database.
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