In an effort to promote the adoption of digital currencies for payments and transfers, PayPal (NASDAQ:PYPL) made an important move by introducing a U.S. dollar stablecoin on Monday. The newly launched stablecoin, known as PayPal USD, is specifically designed to mitigate the wild price fluctuations often associated with cryptocurrencies, making it more suitable for everyday transactions and as a store of value.
Backed by U.S. dollar deposits and short-term U.S. Treasuries, the PayPal USD stablecoin will be issued by Paxos Trust Co, as stated by the company. The move was met with positive market response, leading to a 1.4% increase in PayPal’s shares, which closed at $63.66.
The pegging of PayPal USD to the U.S. dollar ensures its value remains stable, and the company plans to gradually make it available to its customers in the United States. This move signals PayPal’s commitment to integrating cryptocurrencies into its platform, providing its users with more options for conducting transactions.
However, it’s worth noting that the stablecoin launch comes amid regulatory uncertainties in the United States. Just last month, a U.S. congressional committee failed to reach a consensus on a bill aimed at establishing a federal regulatory framework for stablecoins, leaving the landscape still somewhat unclear.
Notably, PayPal isn’t the only major player in the financial industry exploring stablecoins. Visa (NYSE:V) had previously expressed its intention to use the cryptocurrency USD Coin for settling transactions on its payment network in 2021, indicating a growing interest in incorporating digital currencies into mainstream financial services.
As PayPal takes this step towards a more crypto-inclusive future, the industry will likely continue to evolve, with the potential for even greater integration of digital assets into everyday financial activities.
Featured Image: Unsplash @ Muhammad Asyfaul
Author Faith Yakubu 
