It’s been fascinating to watch how the established, more traditional financial institutions have responded to the crypto boom and increased public interest in Web3 technology in recent years. In a new move, finance tech company PayPal has announced a new stablecoin called PayPal USD (PYUSD). As the name implies, it’s backed by the United States Dollar.
PayPal announced its new stablecoin in an official press release yesterday. The coin will be distributed by Paxos Trust Company and is redeemable for cash through the platform. PayPal USD will begin rolling out over the next few weeks. The company’s hope is that the stablecoin will make it easier to transfer money across Web3 services.
"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," said Dan Schulman, president and CEO, PayPal. "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."
Stablecoins are cryptocurrencies backed by established, real-world currencies. This allows them to avoid the pitfalls that most other cryptocurrencies are susceptible to — soaring and crashing in value seemingly on a whim. Real-world currencies certainly see drops and spikes in value as well, but they usually aren’t nearly as dramatic.
With PayPal introducing a USD-backed stablecoin, we’re curious to see if it receives widespread adoption among Web3 enthusiasts. Last year, PayPal introduced a way to send and receive cryptocurrency between wallets on the platform. Count on Shacknews for more interesting stories in the world of finance and technology.