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PayPal Introduces PYUSD for International Payments
Payment giant PayPal unveiled a new feature that allows U.S. customers to utilize its stablecoin, PayPal USD (PYUSD), to fund cross-border transactions. This initiative was announced in a press release on Thursday. Customers now have the ability to convert PYUSD to dollars and transfer funds to recipients in approximately 160 countries through PayPal’s Xoom payment platform without incurring any fees.
PYUSD is a virtual token built on the Ethereum network. It is classified as a dollar-pegged stablecoin, with its value backed by cash equivalents and short-term treasuries. Launched by PayPal last year, the token is issued by Paxos Trust Co.
Jose Fernandez da Ponte, PayPal’s Senior Vice President of the blockchain, cryptocurrency, and digital currency division, emphasized that this development aligns with their vision to promote widespread adoption of cryptocurrencies. He emphasized the dual objectives of creating a stable asset to enhance user confidence and ensuring its utility for commercial and payment purposes.
The Significance of Stablecoins
Unlike volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins are digital assets pegged to stable entities such as the U.S. dollar. This pegging mechanism minimizes fluctuations in value, making them ideal for transactions where immediate access to fiat currencies is essential. In the crypto sphere, stablecoins facilitate seamless trading experiences.
PayPal’s introduction of PYUSD reflects its strategic vision to integrate stablecoins into the broader payment ecosystem. Despite its smaller market capitalization compared to prominent stablecoins like Tether’s USDT, which boasts a market cap of $106 billion, PYUSD marks a notable milestone in PayPal’s crypto offerings, with a market cap of $109 million.
Furthermore, PayPal users can leverage the platform to buy, sell, and transfer cryptocurrencies such as Bitcoin and Ethereum to external wallets, expanding the scope of digital asset transactions.
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