San Jose, California-based payment giant PayPal has unveiled its own stablecoin, PYUSD, in partnership with Paxos Trust Co. This innovative digital currency is meticulously supported by deposits denominated in US dollars, along with short-term Treasuries and comparable cash equivalents, ensuring a secure and reliable peg to the US dollar. The gradual rollout of PYUSD will provide PayPal’s US-based clientele with a new digital asset option.
This groundbreaking move marks a significant milestone as the first major corporation to launch its own stablecoin. Although stablecoins are traditionally employed for inter-exchange transfers of digital assets and infrequently as a means of consumer payments, the rationale for integration within the PayPal ecosystem might raise questions (given the availability of USD). The underlying motive for PayPal’s strategic approach likely revolves around enticing consumer assets away from cryptocurrency exchanges and channeling them into the PayPal network.
According to initial reports from Bloomberg, PayPal perceives a positive shift in the regulatory landscape, characterized by increased clarity, while also observing a growing demand for an alternative stablecoin due to the current market’s concentration. Jose Fernandez da Ponte, who heads PayPal’s blockchain and digital currencies division, emphasizes the evolving perspective on regulations and the emerging potential for an alternative stablecoin solution.
Someone on Twitter finds this situation to be rather unusual because Paxos receives an order to cease the issuance of $BUSD due to concerns about its ability to securely create the token (February ’23). and now PayPal makes a declaration about launching a stablecoin for payments and transfers, denoted as $PYUSD – with Paxos that serves as the issuer.
Don’t you think this is weird? ????????
1. Paxos gets ordered to stop issuing $BUSD over concerns that it can’t “safely” issue the token (Feb ’23)
2. PayPal announces they’ll be releasing a stablecoin for payments and transfers $PYUSD – guess who it’s issued by? Paxos.
— Kyle Chassé (@kyle_chasse) August 7, 2023