PayPal, the esteemed payment enterprise, has ventured into the realm of digital currencies by launching a stablecoin denominated in the U.S. dollar. The core purpose of this move is to bolster the adoption of cryptocurrencies for both transactions and transfers.
Dubbed “PayPal USD,” this stablecoin derives its backing from U.S. dollar deposits and short-term U.S. Treasuries. Paxos Trust Co assumes the mantle of issuance, spearheading this venture under the auspices of PayPal.
This noteworthy development spurred a 1.4% rise in PayPal’s shares, reaching a commendable value of $63.66.
Stablecoins represent a paradigm shift in the cryptocurrency domain, as they mitigate the wild price fluctuations that have hitherto impeded the seamless use of digital assets for payments or as a store of value.
At the heart of this initiative lies the pegging of PayPal USD to the U.S. dollar, thereby ensuring stability and predictability. The gradual rollout of this offering shall be confined to PayPal’s clientele within the United States, as expressed by the digital payments giant.
However, it is worth noting that crafting a regulatory framework for stablecoins remains a contentious matter. A U.S. congressional committee grappled with the issue, but alas, a consensus proved elusive.
In a parallel development, the stalwart firm Visa had, in 2021, disclosed its intent to accept the usage of the cryptocurrency “USD Coin” for transaction settlements on its esteemed payment network.