As on August 7, 2023, PayPal has made a significant move into the world of cryptocurrency by introducing its stablecoin, PYUSD. This stablecoin, which is like a digital version of the US dollar, aims to facilitate various crypto activities while maintaining legitimacy within the United States and implementing robust safeguards.
Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, crypto, and digital currencies, explained on a podcast that they want PYUSD to be a strong option for things like decentralized finance (DeFi), where people use stablecoins a lot.
Currently, USDT and USDC are the most trusted and most used stablecoins by users in the world of cryptocurrency and decentralized finance (DeFi), The launch of PYUSD raises a concern for USDT, USDC, and BUSD, as PayPal has a vast global user base of 435 million users.
Right now, PYUSD is available through the PayPal wallet, but they’re working on getting it onto other cryptocurrency exchanges. Da Ponte stated:
“I think DeFi will be part of the first wave in the sense that we want to go where crypto users are using stablecoins today, and DeFi is a use case for that.”
Once that’s done, users will be able to use PYUSD for many different things in the crypto world. It’s built to work well with Ethereum, a popular cryptocurrency platform since it follows a standard called ERC-20 (The ERC-20 defines a standard for fungible tokens, which means that each token is exactly the same (in terms of type and value) as every other token).
Although, PYUSD follows all the rules in the US and is officially issued by a trusted company called Paxos, which also got the green light from the New York Department of Financial Services (DFS). This means they’re keeping a close watch to prevent any shady activities. He stated:
“It’s noteworthy that Paxos is the official issuer, receiving approval from the New York Department of Financial Security (DFS). Given New York’s stringent mandates related to KYC (Know Your Customer) and anti-money laundering, we’ve ensured the requisite controls are firmly in place.”
This statement comes just after on August 10, 2023, Congresswoman Maxine Waters, a key House Financial Services Committee member, had raised concern about PayPal’s stablecoin launch. She emphasized the need for a federal regulatory framework to oversee and enforce digital assets due to the potential risks to 435 million global PayPal users and financial stability.