Fintech company PayPal has completed its first business payment using PayPal USD (PYUSD), its proprietary USD-pegged stablecoin.

According to an Oct. 3 Bloomberg report, the payment was made to the Big Four accounting firm Ernst & Young through SAP’s digital currency hub. The companies did not disclose the invoice amount. PayPal Holdings is an audit client of Ernst & Young.

The transaction was a way to demonstrate how stablecoins could be used by corporations to make instant payments. 

PayPal launched PYUSD (PYUSD) in August 2023 backed by US dollar deposits and short-term US Treasurys. According to data from DefiLlama, the stablecoin has a market capitalization of $699 million at the time of writing, placing it at eighth position among the largest stablecoins. 

A stablecoin is a cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, like a fiat currency such as the US dollar. This stability makes it more suitable for everyday transactions and reduces the price volatility seen in other cryptocurrencies.

PYUSD Circulating Supply. Source: DefiLlama

“The enterprise environment is very well-suited for it,” said Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, cryptocurrency and digital currency. “It’s a very rational conversation to have with the CFO,” he added.

PayPal has been advancing its digital asset capabilities lately. In September, the company announced that business users in the United States (except in New York) would now be able to buy, sell, and trade crypto directly from their PayPal accounts.

The stablecoin market has been increasingly attracting more players, especially as clear regulations emerge around the globe. 

Robinhood and Revolut are reportedly considering launching their own stablecoins in some jurisdictions as the European Union’s Markets in Crypto-Assets (MiCA) regulation is expected to impact some crypto-native products, reshaping the stablecoin market with higher levels of compliance.

Over the past two years, Tether’s USDT (USDT) has largely dominated the stablecoin market. At the time of writing, USDT has a market capitalization of $119.7 billion, way ahead of its closest competitor, USD Coin (USDC), with a $35.3 billion market capitalization. 

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