Home Business PayPal Launches its U.S. Dollar Stablecoin – What Does it Mean For Customers and Investors?

PayPal Launches its U.S. Dollar Stablecoin – What Does it Mean For Customers and Investors?

PayPal Launches its U.S. Dollar Stablecoin – What Does it Mean For Customers and Investors?

PayPal, a top payment gateway, has just launched its stablecoin, making it the first major financial institution in the United States to do so. The launch has generated much interest in how it will affect customers and what it means for other cryptocurrencies, such as USDT.

A stablecoin is a type of cryptocurrency pegged against a specific fiat currency. When a fiat currency backs it, it is called a fiat-based stablecoin, which is the case of the recent launch by PayPal. It is called PayPal USD (PYUSD) because it has the backing of the fiat-based USD. The implication is that the price is fixed and will remain the same as the USD. Hence, it will not be determined by the forces of demand and supply or crypto mining.

PYUSD operates on the Ethereum network. It uses proof-of-work for a much greener and faster transaction process. This is different from the proof-of-stake used by Bitcoin. Some investors may have seen this coming. That’s because PayPal only recently opened its doors to support other cryptocurrencies for payments. This review explores the implications of the launch for customers.

How PYUSD Can Be Used?

There have been questions following the big announcement of the launch of PYUSD by Paxos.  A crucial one centers around its usability on different platforms. Like other stablecoins such as USDT, consumers can easily exchange Fiat USD for PYUD. So, you can directly convert $1000 from your bank account to 1000 PYUSD. Both have the same face value, except that one is a digital asset and the other is not. On the PayPal network itself, it implies that users can get involved in person-to-person payments. You can transfer the coin from one PayPal user to another, just like on regular crypto exchanges like Binance.

Similarly, it can also be used for direct payments across different platforms. With the currency, you can pay for flight tickets, hotel reservations, and items on Amazon. Indeed, one sector that will also be at the forefront of this new transition is the iGaming industry. PayPal is fully integrated into most of these platforms, like the ones you find on the best deposit bonus online casino in Australia. With that, converting other currencies supported on PayPal to PYUSD is easy. Most of these sites also offer first-time users a special crypto bonus, which could encourage players to opt for this new currency. Ultimately, PYUSD is handy for cheaper, faster, and more secure transactions.

Lower Transaction Fees and Faster Payments

Depending on the amount and the location, PayPal typically charges up to 2.99% to make payments on platforms like Shopify. Let’s remember the fixed fee of $10.01 and above for QR. code transactions and the charges for currency conversions. The launch of PYUSD takes all of that away.

PYUSD runs on the Ethereum network, meaning confirmations will be done in seconds. This is nothing compared to the verifications required for regular fiat payments on PayPal. Certainly, this will positively impact cross-border transactions. Also, the likelihood of more coverage is almost inevitable.

Implication for Investors

This is not the first time a stablecoin has been launched, but what makes the PYUSD different? Stablecoins are not like regular cryptocurrencies, whose prices are determined by the forces of demand and supply. You can think of this as a gift card or prepaid voucher. You buy it and get a coupon with the same monetary value as the purchase fee for payments on supported platforms. So, it is not expected to increase or decrease in value.

Unfortunately, the crypto world is not that simple. The recent event with terraUSD (UST), a supposed stablecoin, has been a lesson to many investors. Billions of dollars were lost after the coin collapsed. However, unlike PYUSD, which is pegged on actual cash reserves in U.S. dollars, the UST stable coin was based on an algorithm. So, the best move for investors is only to buy stablecoins from trusted and regulated issuers.

Unfortunately, many scammers are already taking advantage of the launch of PYUSD to create fake coins with the same name. Some coins are already listed and sold on many crypto exchange platforms. This is a trap for newbies who still need to learn the basics of metaverse tokens, ICOs, and IDOs before making any investments.

However, PayPal insists that its coin will only be sold on its platform, which is an excellent way to control it. There are no plans to make it available on third-party exchangers, and the news will be all over the place when that happens. So, until then, it is best to buy it directly from the company to be sure you are getting the right coin.


PayPal’s launch of its digital currency heralds a new era in the world of cryptocurrencies and global payments. Considering that the company is a major dominant force in the world, the ripple effect of this move will be felt across different sectors. Considering that it is pegged on the U.S. dollar, this will reignite a new set of regulations still missing in the crypto world.

For the end user, it is a big win. You can now make payments using a stable coin from one of the world’s largest electronic payment gateway. This translates to lower transaction fees, more security, and global acceptability.


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