According to multiple foreign media reports on Monday (July 7), U.S. payment giant PayPal has introduced a dollar-pegged stablecoin called "PayPal USD" (PYUSD) to promote the use of digital currencies in payments and transfers.
Key Details of PYUSD
- Issuer: Paxos Trust Co.
- Backing: Fully supported by U.S. deposits, short-term government securities, and cash equivalents.
- Availability: Gradually rolling out to PayPal’s U.S. customers.
Following the announcement, PayPal (NASDAQ: PYPL) shares rose 1.16% in early trading, continuing their pre-market gains. Over the past 12 months, PayPal’s stock has declined 33% as the pandemic-driven surge in online payments subsided.
Strategic Implications
PayPal CEO Dan Schulman aims to solidify the company’s dominance in digital payments by leveraging technology for instant, low-cost transfers without central intermediaries. Schulman, set to resign in coming months, stated that PYUSD will become "a foundational part of the payment infrastructure over time."
Jose Fernandez da Ponte, Head of Blockchain and Digital Currency at PayPal, highlighted growing regulatory clarity and demand for alternative stablecoins due to market concentration.
Regulatory and Market Context
U.S. Legislative Support
- The House Financial Services Committee recently proposed a crypto regulation bill, endorsed by Republican Patrick McHenry.
- McHenry emphasized that PYUSD demonstrates stablecoins’ potential to enhance payment systems under clear regulations.
Stablecoin Landscape
- Purpose: Stablecoins like PYUSD are designed to minimize volatility by pegging to assets like the U.S. dollar.
- Market Size: $126 billion in circulation (per CoinGecko), led by Tether’s USDT.
Unique Aspect: PYUSD is regulated by the New York State Department of Financial Services (NYDFS), ensuring compliance. PayPal secured a local crypto product license in June 2025.
Transparency Measures
Starting September:
- Paxos will publish monthly reserve reports detailing PYUSD-backed assets.
- Independent third-party audits by accounting firms will verify reserves.
FAQs
Q1: How is PYUSD different from other stablecoins?
A: PYUSD is issued by NYDFS-regulated Paxos, offering enhanced transparency and compliance compared to peers like USDT.
Q2: Can non-U.S. customers access PYUSD?
A: Initially, PYUSD is available only to PayPal’s U.S. users, with potential global expansion later.
Q3: What assets back PYUSD?
A: U.S. dollars, short-term Treasuries, and cash equivalents.
Q4: Will PYUSD be used for consumer payments?
A: Yes, PayPal plans to integrate PYUSD for everyday transactions, reducing reliance on traditional banking.
👉 Discover how PYUSD could revolutionize digital payments
Keywords
- PayPal stablecoin
- PYUSD
- Cryptocurrency payments
- Digital currency regulation
- Paxos Trust
- NYDFS compliance
- Stablecoin transparency
- Blockchain payments