PayPal opens PYUSD stablecoin to USD conversions for cross-border transfers.
PayPal allows all US users outside the state of Hawaii to make money transfers to family and friends abroad using US dollars converted from the country's stablecoin, PayPal USD (PYUSD).
According to an April 4 announcement, PayPay's Xoom-powered service will allow money transfers through PYUSD to more than 160 countries without any Xoom transaction fees. “By introducing the option to make cross-border money transfers in dollars converted from PYUSD, Xoom now offers US users an easy and secure way to send money using PYUSD as a source of funds,” the company wrote.
“When this option is selected, Xoom will convert PYUSD to USD currency at the US user's PayPal Cryptocurrency Hub without paying any crypto sales, and recipients will receive it in the sender's chosen fiat currency.”
Through the service, funds can be sent abroad or sent to the recipient's bank account, mobile wallet address or financial institution. A currency conversion will be made, which includes the expansion of transactions not denominated in US dollars. All US users can use the service except in Hawaii, where holding cryptocurrency through PayPal is prohibited by state law.
Issuing and custody of PayPal USD is handled by Paxos Trust Company in New York. As of last August, PYUSD has been minted at nearly $200 million, a number that is less than USD Coin's (USDC) market cap of $32.9 billion and Tether's (USDT) $110 billion. Jose Fernandez da Ponte, senior vice president of PayPal's digital currency group, said the company's goals around PYUSD are to “create stable value to increase user confidence and ensure it's useful for commerce and payments.”
On the same day, Ripple announced its own US dollar-backed stablecoin to compete with the $150 billion stablecoin market. Similarly, on April 3, Nick Van Eck, son of investment management maestro Jan Van Eck, is set to launch a new US dollar-backed stablecoin after closing a $12 million funding round.
Related: What is PayPal USD, and how does it work?
