Introducing the “PYUSD,” Unveiling PayPal’s Journey into Cryptocurrency
On the evening of August 7th, the California-based payment company PayPal announced that it will launch a stablecoin named PayPal USD (PYUSD), making PayPal the first tech giant to issue a stablecoin. This news instantly ignited the entire cryptocurrency industry, as PayPal, with its user base of 430 million, introducing a stablecoin undoubtedly will greatly advance the integration of Web3 with traditional finance and the real world.
Reportedly, the stablecoin PayPal USD (PYUSD) will be issued by Paxos, a company that has previously collaborated with Binance to launch the USD-backed BUSD. In PayPal’s announcement, the official statement reads: “PayPal USD aims to reduce friction in payments in the virtual realm due to lack of experience, facilitate swift value transfer to support friends and family, remittances, or international payments, enabling direct flow to developers and creators, and promoting the continuous expansion of digital assets by the world’s largest brand. While most stablecoins are primarily used within the web3 environment, PayPal USD will be compatible with that ecosystem from day one and will soon be available on Venmo.”
It’s evident that PYUSD will be gradually introduced in the coming weeks, eligible US PayPal customers who purchase PYUSD will be able to transfer PYUSD between PayPal and compatible external wallets, conduct peer-to-peer payments using PYUSD, select PYUSD at checkout, and convert PayPal-supported cryptocurrencies to PayPal USD.
As stated by Dan Schulman, President and CEO of PayPal: “The transition to digital currencies requires a stable instrument that is both native to the digital world and easily connectable to fiat currencies like the US dollar.”
The seemingly abrupt emergence of PYUSD is actually the result of years of strategic planning by PayPal.
As early as 2016, PayPal established a long-term partnership with Coinbase. In 2018, Coinbase enabled US customers to make instant withdrawals through PayPal. Last year, European Coinbase users were able to withdraw funds from their PayPal accounts, with Canadian users following suit.
At the beginning of 2020, insiders reported that following a brief collaboration with the Facebook-led Libra project the previous year, PayPal’s current focus was on expanding its payment expertise. Subsequently, PayPal released job openings to expand its new blockchain research team. PayPal’s Chief Technology Officer, Sri Shivananda, mentioned in an interview that the company wanted to “have its own perspective and understanding of blockchain technology and explore how it can help us create an open digital payment platform that can serve everyone.”
In June 2020, reports emerged that PayPal was planning to directly sell cryptocurrencies to its 325 million users. In October, Charles Cascarilla, Co-Founder and CEO of Paxos, announced that Paxos would support PayPal’s “new service,” allowing US users to directly purchase, hold, and sell crypto assets from their PayPal digital wallets.
In the same year, a research report from Japanese securities firm Mizuho Securities indicated that Bitcoin trading among PayPal users could potentially benefit the company’s stock price and projected a revenue increase of about 20% for the following year. The report raised the company’s stock target price from $270 to $290, while PayPal’s stock price at that time was $218. Meanwhile, Paxos announced securing $142 million in Series C funding from companies including PayPal.
These events reveal that PayPal had been strategically planning for years, leading to the introduction of PYUSD.
In February 2021, according to investor reports from PayPal, in the fourth quarter of 2020, PayPal added a net of 16 million active accounts and processed a total payment volume of $277 billion. Users who bought cryptocurrencies through the platform logged in twice as often as before their cryptocurrency purchases. This marked the first profitable period for the payment giant since introducing its cryptocurrency buying service at the end of the previous year. PayPal’s transaction revenue increased by approximately 12% in the fourth quarter of 2020 compared to the previous quarter, reaching $5.7 billion.
In March 2021, Reuters reported that PayPal would launch a cryptocurrency settlement service, allowing U.S. consumers to use their held cryptocurrencies to make payments to millions of online merchants worldwide. The following day, PayPal CEO Schulman purchased a pair of cowboy boots using Bitcoin through PayPal and recorded the purchase process, which was shared online. In April, Paxos announced completing a $300 million Series D funding round, with continued investment from PayPal.
In May, according to a report by The Block, PayPal officially considered launching a stablecoin. Insiders indicated that if PayPal were to issue a stablecoin, it would be more inclined to collaborate with third parties and had discussed stablecoin matters with several teams, including the Avalanche team. Prior to this, Bloomberg developer Steve Moser discovered relevant code related to PayPal exploring the creation of its own stablecoin within the PayPal iPhone application.
In April 2022, PayPal’s President and CEO, Schulman, emphasized during the company’s quarterly earnings call that digital wallets would play a critical role in PayPal’s future growth. He stated, “We need to double down on digital wallets. I believe that’s the future of the industry and the core of PayPal.”
In February 2023, PayPal had originally planned to launch PYUSD within a few weeks. However, due to the investigation by the New York State Department of Financial Services into its partner Paxos, PayPal postponed the launch of PYUSD and announced the suspension of its stablecoin development efforts.
On-chain transaction records also confirm the above information: The current total supply of PYUSD is 26.9 million tokens. In November 2022, Paxos minted the first batch of 1.1 million PYUSD on the Ethereum network, followed by several small transfer tests. On February 1, 2023, another 26.4 million PYUSD were minted. On February 23, 25.5 million PYUSD were burned. On August 3, another 24.9 million PYUSD were minted.
In conclusion, despite PayPal’s involvement in the cryptocurrency space over the past few years, the official launch of their stablecoin remains a significant event in the development of cryptocurrencies. Stablecoins, as a convenient gateway to enter the crypto world, are often considered important tools for guiding cryptocurrency users.
Furthermore, the compliance journey of PYUSD seems to highlight the relaxation of regulatory policies in various countries and regions. After Singapore and Hong Kong reaped many benefits from embracing Web3, signs also indicate that the attitude of the U.S. political sphere is shifting towards embracing digital assets in step with the times: BlackRock applying for a Bitcoin ETF, a court ruling that XRP is not a security, and now PayPal issuing the stablecoin PYUSD. Changes in the regulatory environment often determine the fate of an industry.
We are entering a new era and stepping into a compliant century!
PlugChain takes the aggregated cross-chain oracle protocol as the core, integrates the advantages of high performance, high expansion, low gas！
Website: https://plugchain.io
Twitter: https://twitter.com/Plugchainclub @Plugchainclub
Telegram: https://t.me/plugchain
Discord: https://discord.gg/GdpPzUt89E
Youtube: https://www.youtube.com/channel/UCW4s0YFA7y1qYis1eW3Wcog
Medium: https://officialplugchain.medium.com/
NFT Market：https://very5.com/
GitHub:https://github.com/oracleNetworkProtocol/plugchain
Official Email：officialplugchain@gmail.com
#PlugChain #Pando #Very5 #Gxswap #Oracle #prc20 #web3
