Stablecoins that are fully supported and regulated have the potential to revolutionize payments in web3 and digitally native contexts. PayPal USD, a US dollar-denominated stablecoin, was launched today to address a rising potential for stablecoins that are fully supported, the company announced on Monday.
PayPal USD is intended to contribute to the payment opportunities provided by stablecoins and is 100% guaranteed by US dollar deposits, short-term US Treasuries, and comparable cash equivalents. PayPal USD is issued by Paxos Trust Company and is redeemable 1:1 for US dollars.
Beginning today and continuing in the coming weeks, qualifying US PayPal customers using PayPal USD will be able to make the following transactions: Transfer PayPal USD to other PayPal accounts and external wallets. It will also be possible to pay at checkout with PayPal USD or to convert it into other cryptocurrencies.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” said Dan Schulman, president and CEO of PayPal.