PayPal Launches Its Native Stablecoin PayPal USD (PYUSD)


PayPal assures its users that PYUSD is fully backed by USD, reserve with funds supporting the stablecoin, while addressing concerns about issuing unbacked tokens.

The payment giant is stepping into the crypto market with the introduction of its native stablecoin PayPal USD (PYUSD). The crypto which was announced in January has finally been launched.

Stablecoins are a type of cryptocurrency designed for relatively stable value. They’re typically pegged to a reserve asset, which could be a fiat currency, commodity, or another financial instrument. Like other stablecoins, PYUSD aims to ensure price stability and is pegged 1:1 to the United States dollar, making it redeemable for USD.

In a release, Dan Schulman, President and CEO of PayPal, stated:

“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar… Our commitment to responsible innovation and compliance, along with our track record of delivering new customer experiences, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”

Paxos Trust Company issues the stablecoin and fully adheres to regulatory oversight of the New York State Department of Financial Services. Among the regulations, customers are protected in cases of insolvency, as their funds cannot be used to settle debt. Paxos’ potential bankruptcy would have a minimal impact on clients’ funds.

PayPal assures its users that PYUSD is fully backed by USD, with reserve funds supporting the stablecoin, addressing concerns about issuing unbacked tokens. Additionally, Paxos will publish a monthly reserve report starting in September 2023, to ensure transparency about the stablecoin’s reserve assets’ value.

“Starting September 2023, Paxos will publish a public monthly Reserve Report for PayPal USD, outlining the reserve composition. Paxos will also provide 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, following attestation standards established by the American Institute of Certified Public Accountants (AICPA),” the company wrote in its press release.

The launched stablecoin will become more accessible to United States users in the coming weeks. They will be able to transfer the stablecoin between PayPal users and compatible external wallets, send payments to others using the token, make purchases by selecting the option at checkout, and convert PayPal-supported crypto to and from PYUSD.

PayPal’s Stellar Reputation and Vast User Base Could Accelerate PYUSD Adoption

PayPal’s introduction of stablecoin aims to expand the options for stablecoin payments in the crypto industry. The company included crypto payment options for its clients in 2020, becoming one of the first payment processors to do so. Launching its stablecoin also appears to be a strategic move for the payment giant to maintain being a go-to option for payments.

With over 350 million users, PayPal has a large user base, and leveraging its reputation could potentially drive increased adoption of its stablecoin. Despite the regulatory challenges that many cryptocurrencies, including stablecoins, are currently facing, the payment processor is confident that the regulatory environment surrounding stablecoins is gradually becoming clearer and that there is a need for additional stablecoin options within the crypto market.



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Temitope Olatunji

Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor’s and master’s degrees in linguistics. When not writing, he trades forex and plays video games. 



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