PayPal launches its own cryptocurrency

The financial technology company PayPal is launching its own stablecoin for making payments on its network. According to Bloomberg, PayPal USD (PYUSD) is issued with the help of Paxos Trust Co.

According to PayPal CEO Dan Schulman, the company will strengthen its dominance in the digital payments industry by issuing its own stablecoin. The developers reported that PYUSD is fully backed by US dollar deposits, short-term treasury bonds, and similar cash equivalents. The token is pegged to the US dollar and will gradually be available to PayPal customers in the US.

PayPal’s stablecoin can be exchanged for US dollars along with other cryptocurrencies available on the company’s network. The token holders will also be able to use PYUSD to pay for online purchases, but it is not yet specified on which platforms. Over time, PYUSD will be available in PayPal’s Venmo app and other compatible crypto wallets outside the PayPal ecosystem.

PayPal expects that PYUSD will be used to trade other digital assets and make in-game payments.

In February of this year, the media reported that PayPal suspended the development of its own stablecoin. As a result, the launch of the token had to be suspended indefinitely. The decision was influenced by an investigation by US regulators into the project’s key partner, fintech company Paxos. «We will, of course, work closely with the relevant regulatory authorities to move forward ,» said Jose Fernandes da Ponte, Senior Vice President of Cryptocurrencies at PayPal.

In May, the PayPal payment system introduced $ 50,000 insurance for cryptocurrency payments, which meets the requirements of Regulation E of the US Consumer Financial Protection Bureau (CFPB).