PayPal, a leading digital payments provider, has made a significant stride in the cryptocurrency space by enabling users in the United States (excluding Hawaii) to utilize a stablecoin for cross-border money transfers. PayPal USD (PYUSD), the local stablecoin, can now be converted into US dollars for funding international transactions to friends and family through a service supported by PayPal’s Xoom, without incurring Xoom transaction fees.
Seamless and Fee-Free Transactions
The announcement made on April 4th revealed that Xoom allows users to remit funds to over 160 countries using PYUSD. Xoom converts PYUSD into USD for these transactions at no additional crypto sale fee, and the beneficiaries receive the funds in their preferred fiat currency. Users can send money directly to bank accounts, mobile wallets, or local financial institutions for pick-up. Conversions into non-USD currencies will be subjected to a conversion fee that includes a spread.
Exploring the Stablecoin Landscape
The issuance and custody of PayPal USD are managed by the Paxos Trust Company in New York. Despite nearly $200 million in PYUSD issuance since last August, the stablecoin’s market value pales in comparison to its major competitors, USD Coin and Tether, with valuations of $32.9 billion and $110 billion, respectively. PayPal’s Cryptocurrency Group’s Senior Vice President, Jose Fernandez da Ponte, expressed the company’s ambition to solidify PYUSD as a trusted and payment-friendly stablecoin.
Key Points to Take into Account
- PayPal’s PYUSD offers cost-effective international transfers.
- Users can remit to over 160 nations sans Xoom fees.
- Transactions finalized in different currencies include a spread in the conversion.
- PayPal aspires to elevate PYUSD’s reliability for payments.
In tandem with PayPal’s announcement, Ripple also revealed plans to launch a US dollar-backed stablecoin to vie in the $150 billion stablecoin market. Moreover, Nick van Eck is set to release a new stablecoin following a successful $12 million funding round, indicating the growing interest and development activity in the stablecoin arena.
