PayPal on Monday launched a dollar-pegged “stablecoin” PayPal USD, the first so-called “stable” cryptocurrency to be launched by a major online payments company as the cryptocurrency industry comes under scrutiny from regulators.
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PayPal users can buy PayPal USD, transfer it to other digital wallets, convert it to other cryptocurrencies, use it to pay online or pay money to loved ones, the California-based group said in a press release.
“The transition to digital currencies requires a stable tool that originates online and easily connects to fiat currencies like the US dollar,” PayPal CEO Dan Schulman is quoted as saying in the press release.
Stablecoins are cryptocurrencies: Transactions are recorded in a decentralized register, the blockchain, and not by a bank, as is the case with conventional currencies.
But while the prices of cryptocurrencies like bitcoin and ether fluctuate wildly, stablecoin creators strive for a stable price.
PayPal thus promises parity with the dollar, thanks to reserves in this currency.
But stablecoins have not been spared from the troubles in the industry. The prices of some of them faltered when cryptocurrency prices plummeted in the spring.
In mid-February, a US regulator ordered Paxos to stop issuing a stablecoin, BUSD, on behalf of Binance.
It was the first blow to the largest cryptocurrency buying platform since the US Securities and Exchange Commission accused it of dodging regulations.
PayPal has also selected Paxos to issue its own stablecoin. The company is required to publish monthly reports of its reserves, which are audited.
AFP
Currently, stablecoins are primarily used to facilitate the exchange of cryptocurrencies between investors without having to go through a bank, making them a vital cog in the crypto space.
They also allow users to access a dollar-pegged product without having a US bank account.
“PayPal USD is designed to reduce friction in payments in virtual environments, facilitate transfers to help friends and family send funds or make international payments, enable direct payments to developers and creators, and fuel the proliferation of digital assets by the world’s biggest brands .” summarizes PayPal.
While authorities are looking for ways to better regulate cryptoassets and several major platforms have gone bankrupt, Sam Altman, the head of OpenAI (ChatGPT), last month launched a new cryptocurrency, Worldcoin, that comes with a verification system is. Identity from the human iris.