PayPal recently announced the rollout of a new stablecoin that runs on the Ethereum network. PayPal USD (PYUSD) will be a US dollar-backed token available to PayPal users based in the US. BitPay now supports payments made with PYUSD across BitPay merchants and in the BitPay Wallet app.
What is PYUSD, why was it created, and how can it be used? We’ll answer these questions and more in the following guide.
What is PayPal USD (PYUSD)?
Issued by Paxos Trust Company, PayPal USD (PYUSD) is a token designed to maintain a 1-1 value ratio with the US dollar. The stablecoin is backed by dollars, short-term US Treasury bills, and other cash equivalents.
Monthly reports will be released by Paxos containing details on the assets that back PYUSD. The reserves will also be audited by a third-party attesting to the value of PYUSD’s backing. This is an important note, as stablecoins have faced controversy over their proof-of-reserves, or lack thereof, in the past.
The first proof-of-reserves statement from Paxos is due to be released in September 2023.
Why did PayPal develop a stablecoin?
PayPal’s creation of a stablecoin represents the most recent development in the company’s foray into the realm of cryptocurrency payments. Here’s a brief timeline of related events:
- PayPal first began letting US users buy, sell, and hold cryptocurrencies in 2020.
- The following year, the company launched a service called Checkout with Crypto, which allowed customers to use crypto to pay for goods and services at millions of merchants.
- Finally, in 2022, PayPal granted its users the ability to move their crypto out of their accounts and into other wallets.
As for the specific reasons for creating a stablecoin, PayPal’s CEO, Dan Schulman, said the following in a press release:
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar.”
He went on to say that PayPal’s long history of innovation when it comes to providing new payment methods made PYUSD the next logical step.
In addition to the above, it’s thought that as an ERC-20 token running on Ethereum, PYUSD can help facilitate the growth of Web3 and DeFi applications by allowing another on-ramp for fiat currency into the ecosystem. The PayPal stablecoin will also allow crypto-focused users of the PayPal app to make payments without needing fiat, as they now have access to a platform-native stablecoin in addition to some of the most popular cryptocurrencies.
How do I use PayPal USD (PYUSD)?
PayPal has said that it will be making PYUSD available to US-based customers gradually over time. The company intends to have the rollout completed by Q4 2023.
Initially, to buy and sell PYUSD, users will first need to create a PayPal account and go through the necessary know-your-customer (KYC) requirements. Check to make sure your jurisdiction allows for registration first.
After setting up an account and completing KYC, the next step is to fund the account. This can be done with a credit or debit card. Alternatively, another PayPal user can send funds to your account. Once funds have been added one way or another, it then becomes possible to buy and spend PYUSD. It’s also expected that PYUSD will be available on several top cryptocurrency exchanges at some point in the near future.
Once purchased through PayPal or on an exchange, PYUSD can be sent to an external wallet and held in self-custody to make payments elsewhere. In the BitPay Wallet app, PYUSD users will have an array of ways to use the new stablecoin.
Spend with any BitPay merchant using PYUSD
Visit our merchant directory for places to spend PYUSD.
Store, send, and receive PYUSD
Store and manage your PYUSD with self-custody! Download the BitPay app to securely store and manage PYUSD.
Buy gift cards for over 250 top retailers and brands
Explore all of the different gift cards you buy with PYUSD in the BitPay app or Extension.
Take control of your crypto
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Featured BitPay merchants that accept PYUSD payments
Several merchants already accept PYUSD as a form of payment.
Xsolla is a global payment and game industry solutions provider that helps developers and publishers to market, sell, connect and optimize their games across platforms.
Namecheap is a domain registration, hosting, and website services company that provides affordable domain names, web hosting, and other online services.
APMEX is a leading online retailer of precious metals, offering a wide selection of gold, silver, platinum, and palladium products, as well as related services like storage and investment options.
CRM Jewelers is a high-end jewelry retailer that specializes in luxury watches, diamond jewelry, and custom-designed pieces.
Jomashop is an online retailer that offers a wide range of luxury goods, including watches, handbags, sunglasses, and other fashion accessories at discounted prices.
American Cancer Society is a nationwide, community-based voluntary health organization dedicated to eliminating cancer as a major health problem by preventing cancer, saving lives, and diminishing suffering from cancer, through research, education, advocacy, and service.
OneGold is an online marketplace for buying, selling, and managing precious metals investments, offering a convenient and secure way to invest in gold, silver, and other precious metals.
VULTR provides a wide range of cloud services, including compute instances and block storage, with a focus on simplicity and low-cost, high-performance infrastructure.
AMC Theatres is the largest movie exhibition company in the United States, Europe and the world with a broad spectrum of theaters and screens that offer an unparalleled movie-going experience.
CyberGhost VPN is a virtual private network service provider that offers secure, fast, and anonymous internet access, protecting your online privacy and allowing you to access restricted content from anywhere in the world.
Hublot is a Swiss luxury watchmaker that designs, manufactures, and markets high-end watches and chronographs, known for its innovative use of materials and modern design.
More ways to spend crypto
BitPay’s Curated Crypto Merchants
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