Meet PYUSD – PayPal Fresh Stablecoin!
PayPal, a big company for handling payments, has done something important. They made a new kind of digital money that’s tied to the regular U.S. dollar. This is a big deal because it’s the first time a major finance and technology company is using digital money for paying and transferring.
This special digital money is called a stablecoin. It’s like a type of cryptocurrency that’s not supposed to change in value a lot. Regular cryptocurrencies like Bitcoin can go up and down in price really quickly, but stablecoins are made to stay stable. Even though stablecoins have been around for a while, not many people have used them for everyday payments. But when PayPal said they’re making their own stablecoin, their company’s value went up by 2.5% in trading.
This move shows that PayPal believes in this new way of using money, even though there have been problems before. Some other big companies tried to make stablecoins too, but they faced problems from financial regulators and government people. For example, Facebook wanted to make a stablecoin called Libra, but they couldn’t because the government worried it might mess up the global financial system. Because of these worries, countries like Britain and the European Union made rules to control how stablecoins can be used. The EU’s rules will start in June 2024.
The U.S. government is also doing something about stablecoins. They’re working on a new law that will make rules for stablecoins. It will say how stablecoin companies need to register and get approval. PayPal’s stablecoin is called PayPal USD. It’s connected to real U.S. dollars and safe U.S. government debt. Another company called Paxos Trust Co will make this stablecoin. Slowly, people in the U.S. will be able to use PayPal USD for their payments.