What is PayPal USD
What is PayPal USD
History
PayPal USD was launched on August 7, 2023. The project was initiated by PayPal, a company with a longstanding history in fintech. The primary purpose of creating PYUSD was to provide a stable, dollar-backed digital asset that could facilitate seamless payments within the PayPal ecosystem and beyond. The launch marked PayPal's significant move into the cryptocurrency space, highlighting the increasing convergence of traditional finance and blockchain technology.
Creators and Developers
PayPal, a company co-founded by Elon Musk, Peter Thiel, and others, is the sole creator of PayPal USD. The stablecoin was developed in partnership with Paxos Trust Company, a regulated blockchain infrastructure platform that also manages the issuance and redemption of the coin. Paxos brings its expertise in blockchain technology and regulatory compliance to ensure that PYUSD is fully backed by US dollar reserves held in custodial accounts.
Technology
PayPal USD operates on the Ethereum blockchain, utilizing the ERC-20 token standard. This choice of blockchain provides PYUSD with the security, scalability, and interoperability offered by the Ethereum network. The use of ERC-20 allows for easy integration with existing decentralized applications (dApps) and platforms within the Ethereum ecosystem. The transparency of blockchain technology ensures that PYUSD’s backing is verifiable, as reserves are subject to regular attestations by third-party auditors.
Issuance and Supply
The issuance of PayPal USD follows a strict 1:1 ratio with the US dollar, meaning that each PYUSD token is backed by one US dollar held in reserve. The stablecoin is not mined; instead, new tokens are minted or burned based on user demand and the amount of USD deposited or withdrawn from PayPal’s accounts. Paxos Trust Company oversees this process, ensuring that the supply of PYUSD remains fully collateralized.
Networks and Support
As an ERC-20 token, PayPal USD is supported on the Ethereum network. This allows users to transfer PYUSD across a wide range of wallets, exchanges, and decentralized platforms that support Ethereum. PayPal has also indicated that they are exploring cross-chain solutions and partnerships that would enable PYUSD to be used across multiple blockchain networks in the future. Currently, the token can be used within PayPal's ecosystem, including for payments, transfers, and conversions between cryptocurrencies and fiat currencies.
Applications and Use Cases
PayPal USD is primarily designed for use within the PayPal ecosystem, facilitating payments and money transfers with the stability of the US dollar. It can be used for purchasing goods and services, peer-to-peer transactions, and as a store of value within the PayPal app. Additionally, PYUSD can be traded on various cryptocurrency exchanges and used within the broader DeFi ecosystem on Ethereum.
Popularity and Market Capitalization
Given its recent launch, PayPal USD is still gaining traction in the market. However, due to PayPal’s extensive user base and reputation, PYUSD quickly garnered attention from both consumers and institutional investors. Its market capitalization is expected to grow as more users and merchants adopt the stablecoin for daily transactions and as a bridge between traditional finance and digital assets.
Regulation and Legal Status
PayPal USD is issued in compliance with US regulations, as Paxos Trust Company is a regulated entity. The stablecoin is subject to regular audits and must adhere to strict standards set by financial regulators, including maintaining full reserves for all issued tokens. This regulatory oversight provides an additional layer of security and trust for users.
Community and Media Coverage
The launch of PayPal USD has been widely covered in the media, given PayPal’s prominence in the financial sector. The stablecoin has been discussed in various forums and communities, particularly within the cryptocurrency space, as it represents a significant step by a major financial player into blockchain technology. PayPal’s existing customer base and global reach are likely to contribute to the growing community around PYUSD.
Supported Networks
Tangem Wallet supports PayPal USD on these networks
- Ethereum
- Solana
PayPal USD official links
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Install the app on your phone or download APKHow to buy PayPal USD in Tangem Wallet.
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PayPal USD FAQ
- Owning cryptocurrency can be important for several reasons: it provides a decentralized way to store and transfer value, offers potential for investment growth, enables participation in emerging financial technologies, and can be used for secure and private transactions.
- A cryptocurrency wallet is a tool or device that allows you to store, manage, and use your cryptocurrency. It keeps your private keys secure and enables you to interact with various blockchain networks, including Bitcoin and Ethereum.
- When choosing a cryptocurrency wallet, consider factors such as security, ease of use, and cryptocurrencies supported. Also determine whether you prefer a hardware or software wallets. Research reviews and compare features to find the best option for your needs.
- Unlike other stablecoins, PYUSD is deeply integrated into the PayPal ecosystem, allowing easy transactions between PayPal accounts. This integration could drive broader adoption among PayPal's large user base, offering seamless fiat-to-crypto conversions and usage.
- PYUSD offers fast and low-cost transactions within PayPal, and the backing by PayPal provides a trusted and familiar interface for users. This stablecoin also allows users to interact with both traditional finance and DeFi applications, expanding its utility.
- Factors such as regulatory developments, competition from other stablecoins, and the broader acceptance of digital payments could significantly influence PYUSD’s adoption. PayPal's reputation and the transparency of PYUSD’s backing will also play crucial roles.
- PYUSD is not fully decentralized, as it is issued by Paxos Trust Company and regulated under U.S. law. This centralization might be a drawback for those who prioritize decentralized finance, though it offers a higher level of regulatory compliance and stability.
Why choose PayPal USD wallet with Tangem.
Private. No registration and KYC required to use the app. We don't track your data.
Secure. Your private keys are encrypted and never leave your device. Only you have control over your funds.
Innovative Design Options. Choose from a variety of elegant designs, including unique co-branded editions and our innovative ring-form factor wallet, ensuring both style and functionality.
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Other crypto assets supported in Tangem Wallet.
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