PayPal has partnered with Xoom to enable cross-border payments using its stablecoin, PayPal USD (PYUSD), according to an announcement from the payments giant on November 19.
The deal is designed to expand access to PYUSD in Asian and African markets, allowing PayPal to settle cross-border transactions outside of traditional banking system business hours, PayPal said.
Xoom is partnering with Cebuana Lhuillier and Yellow Card to handle PYUSD disbursements.
Stablecoins like PYUSD are changing the payments landscape, and by integrating our technology, they can move money in the most efficient way thanks to our stablecoin and payments infrastructure,” Chris Maurice, CEO of Yellow Card, said in a statement.
Source: CoinMarketCap
Launching in 2023, PYUSD is backed 1:1 by the US dollar and issued by Paxos Trust Company, a regulated cryptocurrency custodian in the US. It competes with other USD-backed and regulated stablecoins such as Circle Internet Financial's USD Coin (USDC).
An Ethereum-compatible ERC-20 token, PYUSD is the only stablecoin supported on PayPal's payment gateways. It is designed to be “available to a large and growing community of external developers, wallets, and Web3 applications” and easily integrated by cryptocurrency exchanges, according to PayPal.
PayPal has rolled out a number of measures to expand access to PYUSD, including partnering with Anchorage Digital to launch a rewards program for customers who custody the PayPal USD stablecoin at the cryptocurrency custodian.
In May, PayPal launched PYUSD on Solana (SOL), partnering with Crypto.com, Phantom, and Paxos to bring users onto the blockchain network.
The company also partnered with Web3 infrastructure provider MoonPay to enable users to buy crypto using their PayPal accounts, a partnership that extended to onboarding users to its crypto betting platform Polymarket in July.
Coinbase — which also has an institutional custody arm — has encouraged users to store stablecoins on its platform. Currently, Coinbase offers about 5.2% annual yield on USDC. Coinbase owns a stake in Circle.
Despite its recent success, PYUSD still lags significantly behind USD-pegged stablecoins like Tether USDT and USDC. According to data from CoinMarketCap, the two leading stablecoins command a market capitalization of around $128 billion and $37 billion, respectively.
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