A big player is entering the world of cryptocurrencies. PayPal has its own stablecoin
To promote the acceptance of digital currencies for making payments and transfers – this is the main reason why the American payment company PayPal Holdings has decided to actively enter the world of cryptocurrencies. On Monday, it revealed its own stablecoin called PayPal USD, it will be abbreviated as PYUSD and pegged to the US dollar.
PayPal has been flirting with cryptocurrencies since 2020, allowing its users to buy, sell and make payments using several tokens, including bitcoin, for example. It is only now actively entering the world of cryptocurrencies, launching its own stablecoin.
Stablecoin is very different from traditional cryptocurrencies such as bitcoin or ethereum. This is because it is tied to real value, such as money, gold or other valuables. This minimises the risk of large fluctuations in value that are characteristic of traditional cryptocurrencies.
In theory, this makes stablecoins more suitable for making payments and money transfers, as it protects both the buyer and the seller from the risk of a rapid decline in value.
This is also the case for PYUSD. This stablecoin is backed by dollar reserves and short-term US government bonds, according to the company’s official statement. PYUSD is issued for PayPal by Paxos Trust. However, the new stablecoin will be introduced to individual markets gradually, with PayPal customers in the United States seeing it first.
PayPal CEO Dan Schulman has long made no secret that he sees a future in cryptocurrencies. Through this new digital currency, he seeks to strengthen his company’s position in the digital payments industry. He hopes to achieve fast and cheaper transfers without the need for a central intermediary.
PayPal is the first major player to actively enter the world of cryptocurrencies. Cointurk News has pointed out that this pioneering move could inspire other large companies that have been cautious about cryptocurrencies.
PayPal, of course, is not the first company to come up with the idea of a stablecoin. Stable tokens have been around for nearly a decade, but they are mostly used by merchants to move digital assets between different exchanges.
They have so far been used only to a limited extent in consumer payments. But that’s exactly what PYUSD could change.
According to data from CoinGecko, the total value of stable tokens in circulation is approximately USD 126 billion (CZK 2.8 trillion). The biggest player is Tether Holdings, the company behind the most widely used stablecoin so far, USDT.
Source. photo: coin-turk.com
Author of this article
WAS THIS ARTICLE HELPFUL?
Support us to keep up the good work and to provide you even better content. Your donations will be used to help students get access to quality content for free and pay our contributors’ salaries, who work hard to create this website content! Thank you for all your support!