PayPal has made an important update to its services, allowing all users in the United States, except those in Hawaii, to fund money transfers to their family and friends abroad using U.S. dollars converted from its native stablecoin, PayPal USD (PYUSD). This service, which is powered by PayPal’s Xoom, enables users to transfer money to over 160 countries with no transaction fees. By introducing PYUSD as a funding source, Xoom now offers a convenient and trustworthy way for U.S. users to send money abroad. The funds can be sent to a recipient’s bank account, mobile wallet address, or a financial institution for pickup. However, transactions not denominated in U.S. dollars will be subject to currency conversion, including a spread.
Paxos Trust Company in New York is responsible for issuing and holding PayPal USD. Since its launch in August, approximately $200 million worth of PYUSD has been issued, which is significantly lower than the market caps of USD Coin (USDC) at $32.9 billion and Tether (USDT) at $110 billion. Jose Fernandez da Ponte, the senior vice president of PayPal’s Digital Currency Group, stated that the company’s aim with PYUSD is to establish a stable value that increases user confidence and ensures its suitability for commerce and payments.
In a similar move, Ripple announced on the same day that it will launch its own stablecoin backed by the U.S. dollar, aiming to compete with the $150 billion stablecoin market. Additionally, Nick van Eck, the son of investment management expert Jan van Eck, plans to introduce a new U.S. dollar-backed stablecoin after successfully concluding a $12-million funding round.
If you’re wondering what PayPal USD is and how it works, stay tuned for more information.