- PayPal is set to launch its own dollar-pegged stablecoin on Ethereum called PayPal USD (PYUSD).
- The new stablecoin will be issued by former BUSD issuer Paxos Trust Company.
- The fintech giant aims to establish itself in the growing digital asset space with PYUSD.
- PYUSD comes just days after a key stablecoin bill was cleared by the U.S. House Financial Services Committee.
American fintech giant PayPal is set to launch its own stablecoin on Ethereum. The payment services company announced earlier today that its dollar-pegged PYUSD stablecoin would be 100% backed by U.S. dollar deposits, short-term U.S. Treasuries, and similar cash equivalents. With its ERC-20 stablecoin debut, PayPal is looking to venture into the growing digital asset space.
Paxos Trust Co. Will Issue PayPal’s PYUSD Stablecoin
According to a press release from PayPal, the new PYUSD stablecoin will be issued by Paxos Trust Company, the New York-based blockchain firm that minted Binance’s BUSD stablecoin till February this year. Paxos is licensed by the New York Department of Financial Services (NYDFS), which also issued a BitLicense to PayPal in June last year.
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.”
Dan Schulman, president and CEO, PayPal
PYUSD will initially be made available to U.S.-based PayPal customers, who will be able to purchase it through the payments giant’s online platform. Users will be able to transfer the stablecoin between the platform and compatible external wallets, use it for online purchases, and convert it to one of PayPal’s supported cryptocurrencies.
Starting September 2023, Paxos Trust Co. will publish monthly Reserve Reports for PYUSD outlining the composition of the reserves backing the stablecoin. The stablecoin issuer will also publish third-party attestation of the value of the reserve assets. The attestation itself will be carried out per the standards set by the American Institute of Certified Public Accountants (AICPA).
News of PayPal’s stablecoin comes nearly six months after the fintech giant halted stablecoin development following the crackdown on crypto by regulators in the United States. At the time, Paxos was being probed by the NYDFS for unknown reasons.
The Clarity for Payment Stablecoins Act of 2023, which was cleared by the U.S. House Financial Services Committee last month may have played a role in PYUSD’s launch. Patrick McHenry, Chairman of the Financial Services Committee, said in a statement earlier today that the stablecoin bill brought much-needed clarity surrounding the regulation of stablecoins and other digital assets.