Prestigious online financing company PayPal has now dived into cryptocurrency with its dollar-based coin PayPal USD (PYUSD). Linking the PYUSD value to the US dollar creates a less volatile stablecoin. These stablecoins tie in their value to a fiat currency with a 1:1 ratio and have better market stability than popular volatile crypto options.
What Separates Stable Coins like PayPal USD?
The value of stablecoins like the ETHi token gets backing from a physical asset like a fiat currency, gold, and other commodities, helping to stabilize the value of the coin. Other crypto coins get their value based on speculations and how much traders will pay, which can change at any time.
An Alternative Mode of Payment
PYUSD can be transferred between PayPal accounts and compatible electronic wallets as electronic payment. It is also used for purchasing any PayPal-supported cryptocurrencies.
With a reliable financial base, stablecoins like PYUSD provide a smooth option for beginners in virtual currency. facilitating rapid fund transfers and conducting payments for transactions overseas go seamlessly with this option.
Why Stablecoins Are Trending (and Some Setbacks)
Many global investors support currency-based crypto coins like Tether (USDT) and USD Coins (USDC). It offers a reliable form of investment, especially for countries with depreciating native currencies.
However, a level of risk still lingers with these stablecoins. Transparency on the extent to which fiat currencies back these assets continues to pose as a viable consideration. In fact, the near-total collapse of the stablecoin Terra USD is a solid example.
Having the Right Financial Base Is the Key
On the contrary, PYUSD is backed by U.S. dollar deposits, treasury bills, and other cash equivalents. Moreover, this makes PYUSD redeemable 1:1 for the U.S. dollars. Moreover, customers who will buy the stablecoins can use it in online transactions not worrying about sudden changes in value.
Powered by the Ethereum blockchain, PYUSD has a firm foundation in the market. Paxos Trust Company, a firm offering crypto brokerage services for a decade, offers the currency. PayPal launched this stablecoin after gaining experience accepting Ethereum (ETH) and Bitcoin (BTC) transfers.
The experience of PayPal in both electronic and crypto finance made PYUSD one of the most promising new stablecoins in the market. Additionally, the high potential in crypto finance may become a catalyst in the pursuit of shifting toward digital financing for many people.
Future Looks Bright for PayPal USD
Cryptocurrency is now a new player in the market with PayPal launching its own PYUSD coin. In fact, this milestone in digital financing ensures the future of the crypto market will flourish. As PayPal invests in its stablecoin, the company continues to change for the future as a trailblazer in the industry of digital finance.