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PayPal Stock Price Breaks Consistent Decline, Becomes First Tech Company to Embrace Stablecoins

PayPal announced it launched its US dollar-backed stablecoin in partnership with Paxos Trust, while PayPal's stock price increased by 2.5%in a few hours.


PayPal has launched a U.S. dollar-backed stablecoin.
Creator: Tin Tức Bitcoin. Copyright: 2023 TinTucBitcoin.com

On August 7, PayPal launched its US dollar-backed stablecoin. This initiative made PayPal the first large-scale financial technology firm that embraced digital currencies.


PayPal Stock Price


Over the past 12 months, PayPal shares have fallen by 33%, which placed the asset as the sixth-worst performer on the Nasdaq 100 index.


However, after PayPal’s announcement, the company shares recorded a sharp 2.6% increase within a few hours, from $63.02 to $64.67. At the time of writing, PayPal stock prices seem to be stabilized at around $64.42.


Commenting on the new launch, PayPal’s President and CEO Dan Schulman stated:


"The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar. Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD."

The Stablecoin


The stablecoin, PayPal USD (PYUSD), is fully backed by US dollar deposits, short-term US treasuries, and similar cash equivalents. The stablecoin is redeemable 1:1 for US dollars, and it's issued by Paxos Trust Company.


The stablecoin is an ERC-20-type token issued on the Ethereum blockchain. PayPal said it aimed to seamlessly bridge the gap between cryptocurrencies and fiat money, as well as merchants and developers.


According to the announcement, the PYUSD will be gradually available to all PayPal users residing in the US in the coming weeks. It can be used to transfer money between PayPal and other compatible external wallets, send PYUSD from person-to-person, fund purchases during checkout, and convert other cryptocurrencies PayPal supports into USD.


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