PayPal announces US dollar rate and fixed stable coin 'PayPal USD', the first move in a major financial institution
On August 7, 2023, PayPal announced PayPal USD (PYUSD), a US dollar-denominated stablecoin. This is the first stablecoin issued by a company that is regulated and overseen by financial authorities as a major financial institution.
PayPal Stablecoin | US Dollar Cryptocurrency | PayPal US
Press Release: PayPal Launches US Dollar Stablecoin - Aug 7, 2023
McHenry Statement on PayPal Announcing Launch of Payment Stablecoin | Financial Services Committee
According to the announcement, PayPal USD is 100% backed by dollar deposits, short-term US Treasuries, and other assets equivalent to cash, and can be redeemed one-for-one with dollars.
This will allow US PayPal users to shop with PayPal USD, transact with others, and purchase other cryptocurrencies.
PayPal USD is built on Ethereum and issued by Paxos Trust Company, a technology company specializing in blockchain. PayPal and Paxos Trust Company have been collaborating on virtual currency trading services since 2020, and Paxos Trust Company has previously issued BUSD, a Binance branded stablecoin. However, BUSD has been suspended from new issuance in February 2023 due to increased regulatory scrutiny of Binance.
Patrick McHenry, a U.S. Congressman who has introduced a bipartisan stablecoin regulation bill to Congress to legislate stablecoins, said in a statement following the launch of PayPal USD: Today's announcement is a clear signal that stablecoins have the potential to become pillars of payment systems in the 21st century if issued under a clear regulatory framework. Clear regulation and strong consumer protection are essential to getting the most out of it, which is why it is imperative that Congress enact legislation that provides for comprehensive digital asset regulation, especially for stablecoins. It's more important than ever,' he said.
Stablecoins are digital currencies designed to match the value of fiat currency, often the US dollar. However, the stability of stablecoins is not necessarily guaranteed, and even Tether, the stablecoin with the largest issuance amount so far, has made large loans to Chinese companies that are in danger of bankruptcy. There have been reports of concerns that a bank run will occur from.
In May 2022, there will be a large gap between the price of TerraUSD (UST), an uncollateralized stablecoin, and the dollar, and the value of LUNA, the virtual currency that supported TerraUSD, will drop to virtually zero. Then, a major incident occurred in which Terra's entire system collapsed.
What happened to the virtual currency 'Terra (LUNA)' whose price fell by 99.99% - GIGAZINE
Against this background, PayPal is committed to maintaining transparency in PayPal USD. According to PayPal, the issuer, Paxos Trust Company, will publish a 'Monthly Reserve Report' outlining the products that make up the PayPal USD reserve from September 2023, as well as a public third party on the value of the reserve. A certificate will also be issued. The certificate is claimed to be prepared by an independent third-party accounting firm in accordance with certification standards set by the American Institute of Certified Public Accountants (AICPA).
PayPal President and CEO Dan Shulman said, 'The transition to digital currencies requires a stable vehicle that is both digitally native and easily connected to fiat currencies like the dollar. Responsible innovation and compliance. Our commitment to PayPal, and our track record of delivering new experiences for our customers, will be an essential foundation in contributing to the growth of digital payments through PayPal USD.'
in Web Service, Posted by log1l_ks