PayPal is launching a U.S. dollar-denominated stablecoin called PayPal USD.
PayPal USD is designed to contribute to the opportunity that stablecoins offer for payments. The stablecoin is fully backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents. Further, PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.
Starting today, eligible U.S. PayPal customers who purchase PayPal USD will be able to transfer PayPal USD between PayPal and compatible external wallets. They may also be able to send person-to-person payments using PYUSD; fund purchases with PayPal USD by selecting it at checkout; and convert any of PayPal’s supported cryptocurrencies to and from PayPal USD.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” Dan Schulman, president and CEO of PayPal, said. “Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
PayPal USD will be available to consumers, merchants, and developers to seamlessly connect fiat and digital currencies. As the only stablecoin supported within the PayPal network, PayPal USD leverages PayPal’s experience in payments at scale, combined with the speed, cost and programmability of blockchain protocols.
PayPal USD is designed to reduce friction for payments in virtual environments, facilitate fast transfers of value to support friends and family, send remittances or conduct international payments, enable direct flows to developers and creators, and foster the continued expansion into digital assets by the largest brands in the world.
While most of the current volume of stablecoins is used in web3-specific environments, PayPal USD will be compatible with that ecosystem from day one and will soon be available on Venmo.
As an ERC-20 token issued on the Ethereum blockchain, PayPal USD will be available to an already large and growing community of external developers, wallets and web3 applications, can be easily adopted by exchanges, and will be deployed to power experiences within the PayPal ecosystem.
Starting in September 2023, Paxos will publish a public monthly Reserve Report for PayPal USD that outlines the instruments composing the reserves. Paxos will also publish a public third-party attestation of the value of PayPal USD reserve assets. The attestation will be issued by an independent third-party accounting firm and conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA).