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American payment company PayPal has launched a U.S dollar stablecoin to boost the adoption of digital currencies for payments and transfers.
PayPal is issued by Paxos Trust Co. and fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents, the San Jose, California-based payments company said on Monday. It’s pegged to the dollar and will be gradually available to PayPal’s customers in the US.
The stablecoin, known as PayPal USD, is backed by US dollar deposits and short-term US Treasuries and will be issued by Paxos Trust Co, according to the company.
PayPal’s shares rose 1.4 per cent to US$63.66.
Stablecoins are cryptocurrencies designed to be protected from the wild volatility that makes it difficult to use digital assets for payments or as a store of value.
PayPal USD is pegged to the dollar and will gradually be available to the company’s customers in the United States, the digital payments firm said.
Last month a US congressional committee failed to come to an agreement on a bill to establish a federal regulatory framework for stablecoins.
Visa had said in 2021 that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.