PayPal is a digital payment platform. It has decided to venture into the stablecoins market recently. To this effect, the company has announced a new stablecoin named PayPal USD or PYUSD. The noteworthy feature of PYUSD is that it is backed by USD, cash equivalents, and treasury bills.
PayPal has appointed Paxos protocol to issue the stablecoin. Paxos is also responsible for issuing BUSD. However, the stablecoin in question is said to be pegged against the dollar. The latest press release issued by Paxos Trust shares more details on the project.
As per the document, PYUSD will remove payment barriers for virtual environments. At the same time, the product will ensure a fast transfer of value among peers. PayPal stablecoin is designed to make international remittance hassle-free and at the same time, it will allow developers and creators to create international payment accounts.
At the same time, the token will also play an important role in the development of the blockchain sector by the way of introducing renowned brands.
Compatibility of PayPal’s Stablecoin with Digital Payment Platforms
PayPal stablecoin is an ERC-20-compliant token meaning that it leverages the security of the Ethereum blockchain. At the same time, the product is compatible with various payments application operational in America such as Venmo among others.
In its initial stage, PayPal stablecoin will be available for consumers in the United States only. To ensure transparency, the firm intends to publish its Reserve report for PYUSD starting from September 2023. The report is going to include a third-party audit report to ensure the reconciliation of funds.
The auditing enterprise will be compliant with the American Institute of Certified Public Accounts (AICPA) guidelines. The news about PYUSD has been circulating in the market since last year. The initial launch date for the token was set to take place in 2022 but it faced various hurdles.
PayPal was planning to collaborate with FTX which is now a defunct exchange. PayPal chose Solana blockchain as the hosting network as per Wu Blockchain. However, both partnership plans remain unrealized on account of FTX’s demise in November last year.
On the other hand, Coinbase CEO has recently revealed that Binance has conducted massive USDC conversions to counter the halting of BUSD stablecoin.
Scammers are Launching Fake PayPal Stablecoins
The cryptocurrency market is the fastest trading sector in history on account of its online infrastructure. The worldwide launch of PayPal stablecoin has spread in the market giving a chance to scammers of taking advantage of the situation.
Various impersonating stablecoins assuming the ticker PYUSD have flooded various Ethereum DEX Uniswap. To clear the confusion, a PayPal spokesperson has confirmed the Etherscan address of the real PayPal stablecoin.
At the same time, the company officials have made it clear that the token is not available on any crypto exchange platforms such as Binance and Coinbase. The trend of fake tokens trending on DeFi platforms is not a new phenomenon.
In the past, scammers launched Squid Games tokens leading to millions of dollars in losses. The recent rise of room-temperature superconductors by South Korean inventors led to the flurry of fake LK-99 meme coins.
Since PayPal stablecoins are compatible with blockchain protocols, they can trade on decentralized exchanges in the future. However, for now, the PYUSD ticker coins on Uniswap are not issued by the digital payments company.