This development follows the revelation of the new PayPal dollar-backed stablecoin initiative over a year ago. The stablecoin, created in partnership with Paxos Trust Co, will allow customers to transfer it between compatible external wallets and their PayPal accounts and use it for funding purchases. The availability of the stablecoin began on Monday, and PayPal users will gradually gain the ability to purchase, send, convert, and fund transactions in the upcoming weeks. In any case, the event marks a significant milestone as a prominent U.S. financial company enters the stablecoin space for the first time. PayPal confirmed their stablecoin related endeavors back in early 2022, building upon the earlier integration of cryptocurrency services in 2021, which enabled users to engage with major digital assets like Bitcoin (BTC) and Ether (ETH). PayPal CEO Dan Schulman emphasized the need for a stable digital instrument connected to fiat currency, such as the United States Dollar, to support the ongoing global shift towards digital currencies. Paxos will be responsible for regularly publishing a Reserve Report outlining the backing and value of the stablecoin, including assets like U.S. Treasuries and equivalent cash reserves. Paxos CEO Charles Cascarilla expressed pride in facilitating this transformative financial product. Functioning as an ERC-20 token on the Ethereum network, the PayPal USD stablecoin exemplifies the desire to initiate responsible innovation and compliance while contributing to the advancement of digital payments. The announcement predictably prompted a call for comprehensive digital asset regulation, particularly for stablecoins, Patrick McHenry, Chair of the House Financial Services Committee. This update arrives a few months after PayPal extended its crypto purchase capabilities to Venmo users.
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