PayPal Enables International Transfers with PYUSD Stablecoin
Online payment giant PayPal now offers American customers the ability to fund international transfers through its stablecoin PYUSD via Xoom, PayPalโs money transfer service. This integration allows US customers to utilize stablecoin for sending funds abroad.
- PayPalโs announcement on Thursday highlighted the benefits of reduced costs and enhanced convenience for cross-border payments.
- Users can select PYUSD in their PayPal Cryptocurrency Hub and convert it to USD to send funds to recipients in 160 countries without incurring charges.
- This cost-effective option aims to provide PayPal with a competitive edge in the cross-border payment space, especially compared to the global average fee of over 6% for sending $200.
Enhancing PYUSDโs Visibility and Adoption
This recent development can be seen as PayPalโs strategy to increase PYUSDโs visibility in the stablecoin market and drive its adoption. Paxos, the issuer of PYUSD, has also targeted DeFi as part of its adoption strategy.
- In January, Aave, a prominent Ethereum lending protocol, sought community approval to support PYUSD, leading to a near-unanimous vote in favor of the proposal.
- Launched in August, PayPal USD (PYUSD) operates as an ERC-20 stablecoin on the Ethereum blockchain, issued through a partnership between PayPal and Paxos.
- The stablecoin facilitates online purchases, bill payments, online services, and money transfers, allowing PayPal to enhance its services and expand into new markets like the cryptocurrency market.
Challenges in the Stablecoin Market
Despite its potential, PYUSD has faced challenges in competing with established stablecoins like Tetherโs USDT or Circleโs USDC, with its market cap currently lower than its peak in January. Data also shows that PYUSDโs trading volume has not met expectations, lagging behind other stablecoin competitors.
- Rippleโs entrance into the stablecoin market with plans to launch a stablecoin on the Ethereum network and XRPLedger adds more competition to the space.
- Rippleโs stablecoin will be backed by a mix of US dollars, short-term US Treasuries, and other cash equivalents, with monthly asset audits by a third party.
- The company envisions a significant growth in the stablecoin market, predicting a market value of $2.8 trillion by 2028 and aims to bridge the gap between digital assets and traditional financial systems.
Expanding Stablecoin Options
Rippleโs stablecoin initiative aims to expand stablecoin options on the XRP Ledger network and support product segments in DeFi, such as AMM exchanges, after the introduction of the stablecoin solution.
- In addition to Ethereum and XRP Ledger, Ripple plans to bring its stablecoin to other blockchain networks post-launch, increasing its reach and impact in the crypto space.
Hot Take: The Future of Stablecoins
As the stablecoin market continues to evolve with new entrants like PYUSD and Rippleโs stablecoin, the landscape of cross-border payments and digital assets is poised for significant transformation.
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