PayPal has announced that it will join the stablecoin market with $PYUSD, and Blockchain has confirmed this, recording PayPal USD.
The announcement says that the stablecoin will be backed by investments in US dollars and short-term US Treasuries.
In a news statement, the company’s president and CEO, Dan Schulman, said, “The move towards digital currencies needs a stable instrument that is both digitally native and easy to connect to fiat currency like the U.S. dollar.”
The success of PayPal USD depends on our commitment to responsible innovation and compliance, as well as our past of giving customers new experiences.
The business said that the stablecoin will be available to a “large and growing community of external developers, wallets, and Web3 applications’ ‘ and may be easily accepted by crypto exchanges. In the US, Venmo will add PYUSD.
The payments company asserted it will verify the stablecoin’s funds in an effort to allay concerns about unbacked coins. The news:
Starting in September 2023, Paxos will release a PayPal USD Reserve Report every month. The backup instruments are listed in this report. Paxos will also put out a value of PayPal’s USD reserve assets by a third party.
To be clear, it should say, “The attestation will be done by an independent third-party accounting firm in accordance with attestation standards set by the American Institute of Certified Public Accountants (AICPA).”
This smart move by the company is expected to change the way money works and make it much easier for people to pay with digital tokens.
Read also: Visa partners with PayPal, Venmo, others to deliver new payments app
Advantages of the PayPal stablecoin
Stablecoins mix the benefits of blockchain technology with the stability of traditional money. This helps bridge the gap between traditional financial systems and the digital world.
The startup wants to offer rapid, safe, and affordable cross-border transactions using blockchain technology. This reduces friction and helps the business expand globally.
For years, digital coin payments have been slow. PayPal’s stablecoin entry may change that. PayPal’s support for stablecoins could boost their popularity. PayPal and the blockchain community benefit.
Also, PayPal’s move into the market for stablecoins makes it stand out from other banking companies. By offering a stablecoin, PayPal stands out as an innovator in a field that has been dominated for a long time by big banks. This can help the company get new customers, keep the ones it already has, and keep its place as the leader in digital payments.
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Problems to be faced
The introduction of $PYUSD has a lot of perks, but it could also cause problems with regulations. The rules about stablecoins are always changing, and PayPal has to figure out how to comply in this complex regulatory context.
Binance, Tether, and Circle are all well-known stablecoin companies that have had problems with authorities around the world. But by deliberately working with regulators and showing a commitment to transparency, PayPal can get around possible problems in and build a stablecoin ecosystem that will last.