PayPal Enables Funding of International Money Transfers with Its Stablecoin PYUSD
Summary:
PayPal is set to enable U.S. account holders, except those in Hawaii, to support international monetary transfers using its stablecoin PYUSD, converted from U.S. dollars. The service employs PayPal's Xoom and allows fund transfers to over 160 countries sans Xoom transactions charges. The currency conversion will be devoid of any crypto sales fee, with the recipient receiving the amount in the chosen fiat currency. The PYUSD issuance and custody are handled by Paxos Trust Company in New York.
PayPal is set to allow all American account holders, barring those in Hawaii, to finance international money transfers to friends and relatives using PYUSD, the company's own stablecoin, converted from U.S. dollars. As per the announcement made on 4th April, the facility, which is backed by PayPal's Xoom, enables users to send funds via PYUSD to over 160 countries without any transaction charges by Xoom. The addition of PYUSD funding for global transfers gives users a simple and dependable method to transfer money overseas, with the conversion from PYUSD to USD taking place sans any cryptocurrency sales fee in the user's PayPal Cryptocurrency Hub, and recipients obtaining the funds in the fiat currency designated by the sender.
Funds can be dispatched internationally to a recipient's bank account, mobile wallet, or financial service for collection. If a transaction is not in U.S. dollars, it will undergo currency conversion, which includes a spread. However, Hawaiian users are exempted from the service as state law there forbids the possession of cryptocurrencies with PayPal.
The issuance of PYUSD and, its custody are handled by the New York-based Paxos Trust Company. Since its introduction in August of last year, nearly $200 million PYUSD have been issued, which is significantly lower than the market caps of USD Coin's ($32.9 billion) and Tether's ($110 billion). PayPal's SVP of Digital Currency Group, Jose Fernandez da Ponte, stated that the main objective with PYUSD is to establish a stable value to boost user faith and make it commercially and payment-wise useful.
On the same day, Ripple declared its plans to launch its own stablecoin backed by U.S. dollars to challenge the $150 billion stablecoin market. Similarly, on 3rd April, Nick van Eck, the son of investment guru Jan van Eck, is preparing to release a new stablecoin backed by U.S. dollars, following a funding round where he raised $12 million.
Published At
4/4/2024 6:04:06 PM
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