Paypal debuts in the world of cryptocurrency with her stablecoin linked to the dollar. The online payment giant has launched PayPal Usd (Pyusd), a token that replicates the trend of the dollar: 1 PayPal Usd is in fact equivalent to a US dollar. It will run on the blockchain of Ethereum, the second largest cryptocurrency by capitalization and will soon be available to PayPal users in the United States. It will be issued by Paxos Trust and will be backed by US dollar deposits, short-term Treasury securities and similar cash equivalents. “PayPal users will be able to buy PayPal Usd, transfer them to other digital wallets, convert them into other cryptocurrencies, use them to pay online or to pay money to loved ones,” the Californian group said in a press release. As Bloomberg pointed out, this is the first stablecoin launched by a Big Tech in the financial sector. In fact, Meta had already tried it in 2019 with Libra, but had to take a step back.
The news had a positive – but limited – impact on the title. On Wall Street, PayPal shares closed up 2,66% at $64,42. However, the stock has lost over 30% on the Stock Exchange in the last year.
What is the difference between a stablecoin and a cryptocurrency?
The stablecoin is a lot less subject to market fluctuations being a digital currency anchored to a reference asset such as the dollar in this case, but also commodities such as gold. The volatility of traditional cryptocurrencies – especially in the last couple of years – has often made it difficult for users to use them as a stable medium of exchange but, with the introduction of a stablecoin, PayPal aims to solve this problem. At the moment, the stablecoins in circulation are worth about 126 billion dollars. To dominate the market Tether Usd (which capitalizes more than 80 billion), followed by usdc (26 billion).
