Paypal launched the first stablecoin by a major financial firm. According to Bloomberg, the launch could speed up cryptocurrency payments.
Paypal launched a dollar-backed stablecoin on Monday, making headlines. “Over time, this becomes a part of the overall payments infrastructure,” Paypal CEO Dan Schulman told Bloomberg.
Paxos Trust Co. issues “PayPal USD (PYUSD),” a coin backed by U.S. dollar deposits, short-term Treasury securities, and other low-risk assets. According to the article, Paypal’s U.S. customers will gradually gain access to it.
Schulman expects PYUSD’s fast, cheap, middleman-free transfers will cement Paypal’s digital transaction dominance. Paypal halted its stablecoin project in February citing regulatory concerns. If Paypal proceeded forward, a spokeswoman said it would work closely with financial regulators.
The report says PYUSD would initially support cryptocurrency trading and game/app payments. Bloomberg writer Anna Irrera says Paypal expects to enable affordable remittances and micropayments. Paxos issues reserve reports and third-party attestations for PYUSD while users transfer it between Paypal and Venmo wallets.
Over the past year, Paxos’ BUSD and USDP stablecoins have seen their supplies fall. USDP fell 34.1% this month while BUSD supply fell 15.6%. In mid-February, the NYDFS ordered Paxos to stop issuing BUSD.