US PayPal users can now conduct cross-border money transfers using the company’s PYUSD stablecoin. Announced on Thursday, US citizens can access another unique international payments system where they can convert PYUSD to USD.
Additionally, they can also send funds to recipients in approximately 160 countries without incurring transaction fees.
Stablecoins are designed to minimize volatility in transactions by pegging their value to assets such as fiat currency, gold, or cryptocurrencies.
PYUSD, for instance, is a stablecoin supported by US dollar deposits and treasuries, striving for a 1:1 parity with the USD. It was introduced in 2023 to fulfill the need for international settlement solutions.
A World Bank report showed that it costs more than 6% of the transferred amount to send $200 internationally using conventional channels. PayPal plans to make this cheaper with its PYUSD.
PYUSD is a digital asset issued on the Ethereum blockchain by Paxos Trust Company. It can be bought, sold, held, and transferred within PayPal accounts.
Users can acquire PYUSD via the PayPal app or website, manage it directly in their PayPal account, and use it for fee-free transactions within the US.
Moreover, PYUSD can be sent to Ethereum wallet addresses supporting the token, and it is redeemable 1:1 for US dollars, ensuring its stability.
PayPal has affirmed its commitment to transparency, with Paxos, a partner company on PYUSD, subject to regulatory oversight and regularly publishing reserve reports to uphold trust and accountability.
Jose Fernandez da Ponte, PayPal’s Senior Vice President of the blockchain, cryptocurrency, and digital currency group, in a statement expressed the company’s commitment to driving mainstream adoption of cryptocurrencies through initiatives like enabling Xoom users to fund cross-border money transfers using PYUSD.
“When we decided to bring PayPal USD to market, we had two objectives we wanted to achieve: create something that had a stable value to maximize user confidence and ensure it had utility for commerce and payments”.
“Enabling U.S. users of Xoom the option to fund cross-border money transfers using PYUSD builds on our goal of driving mainstream adoption of cryptocurrencies while also offering an easy way to securely send money to friends and family at a lower cost.”
