PayPal Holdings Inc (NASDAQ:PYPL) has announced the launch of PayPal USD (PYUSD), a US dollar-denominated stablecoin.
The digital and mobile payments technology company said in a statement that the new cryptocurrency is in response to the emerging potential of fully-backed, regulated stablecoins in transforming payments in web3 and digitally native environments.
Because stablecoins are linked to reference assets like the US dollar, they are protected from the volatility of other digital assets.
"The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar," PayPal president and CEO Dan Schulman said in a statement.
"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."
PayPal noted that the new coin is 100% backed by US dollar deposits, short-term US Treasuries and similar cash equivalents. It is redeemable on a one-for-one basis for US dollars and is issued by Paxos Trust, a regulated and licensed trust company.
Eligible US PayPal customers who purchase PayPal USD will be able to transfer the coin between PayPal and compatible external wallets, send person-to-person payments using PYUSD, use it to make purchases and convert any of PayPal’s supported cryptocurrencies to and from PayPal USD, the company added.
PayPal’s shares were up 2.7% at $64.46 shortly after midday in New York.
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