In latest crypto payments push, PayPal launches stablecoin
PayPal Holdings Inc. is rolling out a stablecoin, the first by a large financial company and a potentially significant boost to the sluggish adoption of digital tokens for payments.
PayPal USD (PYUSD) is issued by Paxos Trust Co. and fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents, the San Jose, California-based payments company said on Monday. It's pegged to the dollar and will be gradually available to PayPal's customers in the US.
With PYUSD, Chief Executive Officer Dan Schulman is seeking to cement PayPal's dominance in digital payments by leaning on technology that enables instant and lower-cost transfers without a central intermediary. PayPal shares have slumped 33% in the past 12 months, the sixth-worst performer on the Nasdaq 100 Index, as the pandemic-era surge in online payments abated.
“The vision over time is that this becomes a part of the overall payments infrastructure,“ Schulman, who's preparing to step down in coming months, said in an interview.
Stablecoins — crypto tokens that are pegged to an asset like the dollar — have been around for almost a decade, but they're mostly used by traders to move digital assets between exchanges and have made limited inroads into consumer payments. There's roughly $126 billion worth of stablecoins in circulation, according to CoinGecko, the biggest by far being Tether Holdings Ltd.'s USDT.
Some have been controversial: A high-profile attempt by Meta Inc. unraveled last year after an intense regulatory backlash. PayPal itself paused work on PYUSD in February as regulators stepped up scrutiny of cryptocurrencies.
The company now believes the regulatory environment is “progressing toward more clarity” and sees rising demand for an
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