PayPal introduced its new stablecoin, which it claims is 100% backed by U.S. dollar deposits. If you are interested to invest in the new PayPal USD, here's everything you need to know about it.
PayPal USD: What to Know About It
According to Engadget's latest report, the fintech company launched the new USD-pegged stablecoin called PayPal USD.
The online payment service provider's stablecoin project was first noticed in January 2022 when a developer found images and codes for a PayPal coin.
Now, the fintech company finally confirmed the new stablecoin on Aug. 7, saying that consumers can redeem this stable crypto 1:1 for U.S. dollars.
Aside from USD, the new stablecoin is also backed by short-term U.S. Treasuries, as well as other similar cash equivalents.
Via its official Newsroom blog post, PayPal said that the new stablecoin is specifically designed for the following reasons:
- Send remittances or conduct international payments.
- Foster the continued expansion into digital assets by the largest brands in the world.
- Enable direct flows to developers and creators.
- Facilitate fast transfers of value to support friends and family
- Reduce friction for in-experience payments in virtual environments.
PayPal said that the new PayPal USD will be compatible with web3-specific environments just like other existing stablecoins.
The financial tech firm added that the new stablecoin will also be available on Venmo soon.
For those who are interested to purchase the new PayPal USD, here are the following things you can do:
- Convert any of PayPal's supported cryptocurrencies to and from PayPal USD
- Transfer PayPal USD between PayPal and compatible external wallets
- Send person-to-person payments using PYUSD
- Fund purchases with PayPal USD by selecting it at checkout
Should You Invest in PayPal USD?
Experts said that investing in the new PayPal USD should be done cautiously. They explained that although it is supported by the U.S. dollar and can easily be exchanged or transferred, stablecoins are still like cryptocurrencies.
This means that stablecoins are also among the riskiest financial assets. Even if they are backed by the U.S. dollar, PayPal USD, and other stablecoins are still vulnerable to volatility.
This can be seen when the TerraUSD collapsed in 2022. If you want to learn reasons why you need to be careful when investing in the new PayPal USD stablecoin, you can click this link.