PayPal has announced the introduction of a U.S. dollar-denominated stablecoin, PayPal USD (PYUSD), backed by U.S. dollar deposits, short-term U.S Treasuries, and similar cash equivalents. Issued by Paxos, PayPal USD is redeemable 1:1 for U.S. dollars.

According to PayPal’s president and CEO, Dan Schulman, the stablecoin is aimed at contributing to digital payments and is intended to serve as a stable instrument connected to fiat currency like the U.S. dollar.

In the coming weeks, eligible U.S. PayPal customers will be able to purchase PayPal USD and use it for various functions including transferring PayPal USD between PayPal and compatible external wallets, sending person-to-person payments with PYUSD, funding purchases with PayPal USD at checkout, and converting supported cryptocurrencies to and from PayPal USD.

As an ERC-20 token issued on the Ethereum blockchain, PayPal USD will be available to developers, wallets, web3 applications, and can be adopted by exchanges. It aims to power experiences within the PayPal ecosystem.

PayPal USD is also set to be compatible with Web3-specific environments, and will soon be accessible on Venmo.

PayPal USD is issued by Paxos Trust Company, regulated by the New York State Department of Financial Services. PayPal obtained a BitLicense from NYDFS in June 2022.

[Image courtesy: PayPal]