PayPal has disclosed that its PayPal USD (PYUSD) stablecoin is now accessible through its subsidiary app, Venmo. The announcement was made on September 20, 2023, and represents a strategic expansion of PYUSD’s utility, with the aim of connecting traditional fiat currency with the web3 ecosystem.
PYUSD, PayPal’s dollar-denominated stablecoin, is a pioneering digital asset that boasts full backing by U.S. dollar deposits, short-term U.S. Treasuries, and similar cash equivalents, ensuring its stability and reliability as a digital medium of exchange. The primary objective behind the launch of PYUSD was to create a digital value that seamlessly integrates with both traditional and web3 financial systems, ultimately reducing transaction friction, enhancing speed, and reducing costs for users.
A notable development in this regard is the integration of PYUSD into Venmo, a popular peer-to-peer payment app under the PayPal umbrella. Select Venmo users can now access and purchase PYUSD, enabling them to send digital currency to friends and family on PayPal, Venmo, and other compatible external wallets. This integration allows for wallet interoperability at scale, with the added benefit of no transaction fees, connecting two wallets that each have millions of users.
External wallet users and merchants that accept PYUSD will also have the capability to receive transfers from Venmo users, further expanding the coin’s usability. However, it’s important to note that blockchain network fees apply to these transactions.
Since its initial market launch a few weeks ago, PYUSD has experienced remarkable adoption and integration across various platforms. The stablecoin is now available on select exchanges including Crypto.com, Bitstamp, Coinbase, and Kraken. Leading wallets such as MetaMask, Ledger, and Phantom have also embraced PYUSD, as have custodians and institutional service providers like Fireblocks, Copper, Paxos, and Fordefi. Additionally, crypto payment service provider Bitpay now supports PYUSD, underscoring its growing recognition and utility.
Notably, PYUSD has received regulatory approval from the New York State Department of Financial Services, streamlining the process for virtual currency entities licensed in New York to integrate and support PYUSD. This regulatory green light demonstrates PayPal’s commitment to adhering to rigorous industry standards and regulatory compliance.
While PYUSD continues to gain momentum in the digital currency market, it is essential to contextualize its current market cap. As of the announcement date, PYUSD holds a market cap of $44 million, significantly smaller than other leading stablecoins. By way of comparison, Tether’s USDT stablecoin boasts a substantial $83 billion in circulation, while Circle’s USDC stablecoin commands $26 billion in circulation.
The integration of PYUSD into Venmo represents a pivotal moment in PayPal’s journey to establish itself as a prominent player in the digital currency realm. As PayPal continues to expand the reach of its stablecoin and foster a thriving digital economy, the world watches with anticipation for further developments and innovations in the ever-evolving landscape of cryptocurrencies and stablecoins.
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