Global payments giant PayPal (PYPL) is entering the cryptocurrency market with its own U.S. dollar-pegged stablecoin, PayPal USD (PYUSD).
The Ethereum-based token will soon be available to PayPal users in the U.S. and is the first time a major financial company is issuing its own stablecoin. Users can transfer PYUSD between PayPal and supported external wallets, fund goods and services purchases or convert any of PayPal's supported cryptocurrencies to and from PYUSD.
PayPal said the stablecoin will be available to an "already large and growing community of external developers, wallets and web3 applications," and can be easily adopted by crypto exchanges.
PYUSD is issued by New York-based crypto financial services firm Paxos Trust and fully backed by U.S. dollar deposits, short-term Treasuries and similar cash equivalents. It is redeemable for dollars at all times and can also be exchanged for other cryptocurrencies available on PayPal’s network, such as bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and litecoin (LTC).