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PayPal Reveals Ambitions in DeFi, Soon After its Stablecoin Launch

PayPal wants to ensure that its stable token will have enough room to combat its rivals, the USDC and the USDT, so it aims to establish a decentralized finance ecosystem.


PayPal has revealed its DeFi ambitions after launching a stablecoin.
Creator: Justin Sullivan. Copyright: Getty Images 2023

PayPal revealed its plans to launch a decentralized finance (DeFi) ecosystem to give its newly launched stablecoin enough room to develop and combat its rivals - USDC and USDT.


PayPal Prepares for DeFi


Paypal’s senior vice president of blockchain, crypto, and digital currencies, Jose Fernandez da Ponte spoke to Unchained Podcast and talked about PayPal’s future plans in the crypto environment.

Ponte stated:


“We’re a few years away from the mainstream use of stablecoins in day-to-day payments. But there are sectors that are very ripe for that use right now.”

Ponte said remittances and international payments were two of the use cases in that stablecoins have been becoming actively used. Through a company, they acquired called Zoom, PayPal has been active on the remittances front for a few years now.


In terms of the international payments front, Ponte said “it makes a ton of sense. If you are a company that is exporting to a foreign country and you want to receive payments,” Instead of waiting a couple of days for the wire transfer to come through and paying a lot of money for the service fees, the use of stablecoins will just be faster and, as Ponte put it, “faster is cheaper.”


PayPal is active in both these fields that are adopting stablecoins. Therefore, Ponte said that the company wants to make sure that its stablecoin, PYUSD, will be able to develop enough to rival other major stablecoins like USDC and USDT. Ponte stated:


“I think DeFi will be part of the first wave in the sense that we want to go where crypto users are using stablecoins today, and DeFi is a use case for that.”

PYUSD


PayPal announced the launch of its US dollar-pegged stablecoin PYUSD on August 7. The PYUSD is launched in partnership with Paxos and will be used for money transfers between PayPal and compatible external wallets, person-to-person transfers, fund purchases, and checkout.


Ponte spoke about the PYUSD during the podcast as well, where he mentioned that Paxos is the official user of the stablecoin, and it has received approval from the New York Department of Financial Security (DFS). He stated:


“Given New York’s stringent mandates related to KYC (Know Your Customer) and anti-money laundering, we’ve ensured the requisite controls are firmly in place.”

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