PayPal has introduced its Ethereum-based PYUSD stablecoin to Venmo users, expanding crypto options on its platform.
PayPal has made headlines by rolling out its PYUSD stablecoin to the Venmo platform. A select group of Venmo users now have the privilege of buying this ERC-20 stablecoin, with plans to extend this feature to the broader user base in the upcoming weeks.
What is PYUSD?
PYUSD is a stablecoin underpinned by the Ethereum blockchain, and it maintains its value by being pegged to the U.S. dollar. This essentially means that for every PYUSD token in circulation, there’s an equivalent amount in cash or short-term treasuries guaranteeing its value. Since its inception in August, Paxos Trust Co. has taken responsibility for issuing PYUSD tokens.
Stablecoins, like PYUSD, have gained traction in the cryptocurrency domain primarily because they offer a refuge for traders. When traders are unable to promptly access traditional fiat currencies in banks, they can lean on stablecoins to ensure a smooth buying or selling experience.
PYUSD’s Place in the Market
When it comes to purchasing PYUSD, users are spoiled for choice. Leading crypto exchanges such as Crypto.com, Coinbase, and Kraken list PYUSD, ensuring easy accessibility for those interested in buying it. With the introduction of PYUSD on Venmo, users can now also transfer these stablecoins to friends or to merchants, amplifying its utility.
For those unfamiliar with Venmo, it’s a widely-used mobile payment app that falls under the PayPal umbrella. The app’s primary function is to facilitate payments between friends or businesses. This new integration means that not only can users purchase PYUSD on Venmo, but they can also send it to other users, including those with PayPal wallets.
Perks of Using PYUSD on Venmo
A standout feature of this integration is the cost-free transfers between PayPal and Venmo users. PayPal emphasizes that this is the first instance where users can send stablecoins to one another without incurring any fees. However, it’s worth noting that transferring PYUSD from Venmo to an external crypto wallet, not affiliated with PayPal, will come with associated charges.
When evaluating PYUSD’s position in the stablecoin arena, it’s clear that there’s significant room for growth. Currently, PYUSD’s market capitalization sits at a modest $44.3 million. In comparison, other dominant stablecoins in the market, like Tether (USDT) and USD Coin (USDC), boast market caps of $83.1 billion and $25.9 billion respectively.
Paxos Trust Co. has affirmed its commitment to backing PYUSD, revealing in a recent report that they held assets worth $45.3 million for PYUSD by the end of the previous month.
Besides PYUSD, PayPal continues to show its enthusiasm for cryptocurrencies by enabling its users to trade major cryptos like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. This move solidifies PayPal’s intent to embed itself deeper into the crypto infrastructure, aiming to streamline and enhance the overall payments landscape.