As a seasoned researcher with a keen interest in the dynamic world of fintech, I find myself continually intrigued by the rapid evolution of stablecoins and their potential to revolutionize cross-border payments. The latest development between PayPal and Xoom, leveraging PayPal USD (PYUSD), is yet another exciting step forward in this sphere.
Through a recent collaboration with Xoom, PayPal is now able to facilitate international transactions utilizing their stablecoin, PayPal’s USD (PYUSD). This announcement was made by PayPal on November 19th.
As an analyst, I can express this information as follows: In collaboration with our partners, I aim to broaden the reach of PYUSD into Asian and African markets. This strategic move also allows PayPal to handle cross-border transactions beyond conventional banking hours.
Xoom is working with Cebuana Lhuillier and Yellow Card to handle PYUSD disbursements.
[S]tablecoins such as PYUSD are reshaping the payment sector, and by adopting our technology, they can transfer funds more efficiently than ever before,” Chris Maurice, CEO of Yellow Card, stated, highlighting their innovative stablecoin and payment system.
Introduced in 2023, the digital currency known as PYUSD is tied to one U.S. dollar for every unit issued and is managed by the U.S.-regulated Paxos Trust Company, a trusted custodian of cryptocurrencies. It stands among other stablecoins, like the USD Coin USDC from Circle Internet Financial, that are also regulated and pegged to the U.S. dollar.
PayPal supports only one stablecoin, PYUSD, which is compatible with Ethereum‘s ERC-20 standard, on its payment infrastructure. This token was created to be accessible for a vast and expanding community of external developers, digital wallets, and Web3 applications. Furthermore, it can be easily integrated by cryptocurrency trading platforms, as stated by PayPal.
PayPal is making efforts to increase the availability of PYUSD by collaborating with Anchorage Digital on a loyalty program. This program rewards PayPal USD stablecoin holders who store their assets with Anchorage Digital, acting as their cryptocurrency custodian.
In May, PayPal debuted PYUSD on the Solana platform, collaborating with Crypto.com, Phantom, and Paxos to facilitate user access to the blockchain network.
Additionally, it collaborated with MoonPay, a web3 infrastructure service, enabling users to purchase cryptocurrencies directly from their PayPal accounts. This cooperation expanded further in July, facilitating the transition of users onto the cryptocurrency betting platform, Polymarket.
As a financial analyst, I can share that platforms like Coinbase, with its institutional custody wing, actively encourage users to store stablecoins such as USDC within their system. Currently, they provide an attractive annual percentage yield of approximately 5.2% on USDC holdings. It’s worth noting that Coinbase holds equity in Circle, the company behind USDC.
Although PYUSD has had recent achievements, it still trails significantly behind the popular dollar-backed stablecoins Tether (USDT) and USD Coin (USDC). As per CoinMarketCap’s data, USDT and USDC hold market capitalizations of approximately $128 billion and $37 billion each.
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2024-11-19 22:32