After at least 2 years of deliberation, development, and delay, digital payments giant PayPal has finally launched its own US dollar stablecoin, allowing users to “buy, sell, hold and transfer” tokens on the platform. That doesn’t sound too new, since that’s basically what people can do with an existing checking account or PayPal account holding dollars.
“What can you do with PayPal USD (PYUSD) on PayPal?” the company asked in an explanation posted on its website, stating that the token can be sent to eligible accounts in the United States. period without paying any fees. It can also be used to shop online, just like using regular dollars or a credit card.
“If you’re looking to kick things up a notch, use PYUSD in our conversion feature to buy the various cryptocurrencies we support,” the company added.
While PayPal says the stablecoin will be rolling out from today to eligible customers in the US, the website has yet to show an option to buy PYUSD. The site requires users to provide a Social Security number to access crypto services.
The company says it will allow users to buy PYUSD and then convert it to Bitcoin and ETH using an “exchange rate that includes a spread for PayPal on each buy and sell transaction.”
CT reacts to PayPal’s stablecoin
Users on social media also question what is this token used for and who wants it?
“Who will buy the PayPal stablecoin?” asked smart contract researcher ShieldifyAnon, pointing out that the payments company’s new stablecoin “uses an old version of Solidity from 2018.”
Other users like 0xCygaar, a software engineer who often talks about cryptocurrencies on the social media platform, questioned how PayPal’s new token allows “holders to pause all transfers.” … freeze addresses to prevent action… and admins increase total discretionary supply.”
The decision to issue PYUSD on Ethereum surprised many, with some saying the choice was a watershed moment for the protocol.
Fees on Ethereum
But others have questioned this strategy, considering how costly it can be to trade in Ethereum.
“Instead of dozens of less expensive rollups they could have used, PayPal launching a stablecoin on the Ethereum mainnet is really a great way to make sure their own exorbitant fees look like a blip small next to the gas fee,” wrote Web3 enthusiast- David Phelps.
PayPal’s Crypto History
PayPal has been in the crypto space for a while and allows customers to hold coins like Bitcoin, Bitcoin Cash, ETH, and Litecoin. In its first-quarter earnings report of this year, the company revealed it is keeping close to $1 billion in crypto safe for its customers.
PayPal’s Stablecoin Journey
In 2021, PayPal chatted with some of the industry’s stablecoin protocol developers as they began exploring their own dollar-pegged token.
At the time, the crypto industry was growing relatively strong with billions of dollars of new capital pouring into the industry. PayPal’s stablecoin ambitions hit a snag earlier this year, and it halted plans amid reports of Paxos being investigated.
Despite the scrutiny, Paxos remains a partner of PayPal in the stablecoin launch. They said on Monday that the partnership is an important milestone for the industry.
“PYUSD is the first of its kind, representing the next stage of US dollars on the blockchain,” wrote Paxos, calling it “the world’s most secure US dollar-backed digital asset “.
As expected, not all crypto enthusiasts welcomed the news, and Blockware Solutions Chief Analyst Joe Burnett didn’t say too much about the launch. He wrote:
“The crypto community cheering Paypal to launch a “stablecoin” in USD is a sign that they have completely failed in this conspiracy. Buy Bitcoins. Keep it in cold storage. That is innovation. Not “Dollars on the blockchain of the big tech guys”.
