Yesterday PayPal announced the integration of its PYUSD stablecoin with its Xoom cross border payment app. U.S. customers can fund payments using the stablecoin with no transaction fees. However, if the payee receives a different currency it will be subject to normal exchange rates.
“When we decided to bring PayPal USD to market, we had two objectives we wanted to achieve: create something that had a stable value to maximize user confidence and ensure it had utility for commerce and payments,” said Jose Fernandez da Ponte, SVP of the Blockchain, Cryptocurrency, and Digital Currency Group, PayPal.
“Enabling U.S. users of Xoom the option to fund cross-border money transfers using PYUSD builds on our goal of driving mainstream adoption of cryptocurrencies while also offering an easy way to securely send money to friends and family at a lower cost.”
PayPal launched its stablecoin in August last year and currently has a market capitalization of $190 million. At launch, da Ponte acknowledged that the initial use cases would likely relate to Web3. However, he expressed an interest in using them for cross-border payments, gaming, and micropayments.
To date firms in the DeFi space hold a significant proportion of the PYUSD balance. For example, the top three wallets comprise 49% of the stablecoin’s balance and are linked to Frax Finance, Defiance Capital and Curv. Frax and Curv are both DeFi protocols.
A queue of new stablecoins
While PayPal was one of the first major fintechs to launch a retail stablecoin, others are planning to go live soon. Ripple announced plans for one yesterday.
Societe Generale Forge’s EURCV is now listed on a crypto exchange. And next year Deutsche Bank’s asset management arm DWS plans to launch AllUnity, a Euro stablecoin joint venture with Galaxy and Flow Traders. Stateside, another asset manager WisdomTree recently received a trust charter allowing it to issue stablecoins.
