PayPal launches stablecoin in bid to boost crypto payments and transfers By Investing.com

Investing.com — PayPal (NASDAQ:PYPL) has become the first large financial services company to launch its own stablecoin, as the group looks to fuel the adoption of digital tokens for payments.

The stablecoin, known as PayPal USD, will be backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents, PayPal announced Monday. Paxos Trust Company will issue PayPal USD.

Stablecoins, a type of crypto token that have been pegged to an asset like the dollar, have existed for nearly a decade but have mostly been used more to facilitate transfers between traders instead of consumer payments. According to data from CoinGecko cited by Bloomberg, there is about $126 billion worth of stablecoins currently in circulation.

PayPal President and Chief Executive Officer Dan Schulman said in a statement that PayPal USD can provide the “foundation necessary to contribute to the growth of digital payments” through stablecoins.

“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” Schulman said.

Starting today, eligible customers in the U.S. will be able to purchase PayPal USD to make transfers between PayPal and external wallets, send person-to-person payments, and fund purchases. Any of PayPal’s supported cryptocurrencies will also be to convertible with PayPal USD, the San Jose-based group noted.

The move comes as PayPal, which has been impacted by an easing in online spending after the pandemic, attempts to boost the digital payment options available to its customers. The company’s share price rose in early U.S. trading Monday but has slipped by more than 34% over the past one-year period.

Meanwhile, speaking to Bloomberg, PayPal blockchain and digital currencies team head Jose Fernandez da Ponte argued that the regulatory environment surrounding stablecoins is becoming clearer. PayPal previously halted work on PayPal USD due to heightened scrutiny of stablecoins by regulators.

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