PayPal has been flirting with cryptocurrencies since 2020, allowing its users to buy, sell, and make payments using several tokens, including, for example, Bitcoin. It is actively entering the world of cryptocurrencies only now, when it launches its own stablecoin.
Stablecoin is quite different from classic cryptocurrencies such as Bitcoin or Ethereum. It is tied to real value, such as money, gold or other valuables. This minimizes the risk of large fluctuations in value that are characteristic of traditional cryptocurrencies.
In theory, stablecoins are therefore more suitable for making payments and money transfers, because they protect both the buyer and the seller from the risk of a rapid decrease in value.
Czechs traded 1.8 billion crowns in cryptocurrencies this year
Dollars and bonds
This is also the case with PYUSD. This stablecoin is backed by dollar reserves and short-term US government bonds, according to the company’s official statement. For PayPal, PYUSD is issued by Paxos Trust. However, the new stablecoin will be rolled out to individual markets gradually, starting with PayPal customers in the United States.
The PYUSD stable token is designed so that it can be exchanged at any time for dollars or other cryptocurrencies available within the PayPal network and can also be used to finance purchases.
PayPal CEO Dan Schulman has long made no secret that he sees the future in cryptocurrencies. Through this new digital currency, he is trying to strengthen his company’s position in the field of digital payments. At the same time, it promises fast and cheaper transfers without the need for a central intermediary.
There are far more stablecoins
PayPal is the first major player to actively enter the cryptocurrency world. Server Cointurk News pointed out that this pioneering step could be an inspiration for other large companies that are treading cautiously around cryptocurrencies.
Of course, PayPal is not the first company to come up with the idea of a stablecoin. Stable tokens have been around for almost a decade, but are mostly used by traders to move digital assets between different exchanges.
So far, they have only been used to a limited extent in the context of consumer payments. But that’s exactly what PYUSD could change.
Dle data from CoinGecko the total value of stable tokens in circulation reaches approximately USD 126 billion (CZK 2.8 trillion). The biggest player is the company Tether Holdings, which is behind the most widespread stablecoin USDT.
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2023-08-08 09:21:26
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