PayPal shares rose more than 1% following the news.

PayPal announced the creation of a US dollar-backed stablecoin on Monday as the latest addition to its range of crypto services. It is the first such step by a major financial institution in the United States.

PayPal USD (PYUSD), the new asset, was created to address the “emerging potential” to “transform payments in web3 and digitally native environments.” Its launch comes as market participants await a vote in Congress on a major stablecoin bill, which has recently progressed to the House alongside three other crypto initiatives for the first time.

The stablecoin’s function, according to PayPal, is to eliminate friction for inexperienced payments in virtual settings and to allow direct flows to developers. It is redeemable in dollars and backed by dollar deposits, short-term US Treasury bills, and other cash equivalents.

“The shift toward digital currencies necessitates a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” stated PayPal President and CEO Dan Schulman. “Our commitment to responsible innovation and compliance, as well as our track record of delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”

Paxos, which previously produced the dollar-pegged, Binance-branded stablecoin BUSD, is the company behind PayPal USD. The New York State Department of Financial Services ordered Paxos to halt issuing BUSD in February, kicking off this year’s drop in the stablecoin market cap.

Следите за нами и ставьте лайки: