PayPal has expanded its services to allow users in the United States (excluding Hawaii) to fund money transfers to family and friends abroad using U.S. dollars converted from its stablecoin, PayPal USD (PYUSD). The announcement, made on April 4, stated that the service, powered by PayPal’s Xoom, enables users to send money internationally to over 160 countries with no Xoom transaction fees. This new feature provides a convenient and secure way for U.S. users to utilize PYUSD as a funding source for cross-border transfers. Recipients can receive funds in their bank accounts, mobile wallets, or through a financial institution for pickup. Transactions not in U.S. dollars will be subject to currency conversion, with an associated spread. All U.S. users, except those in Hawaii, can access this service, as the holding of cryptocurrencies with PayPal is prohibited by state law in Hawaii.
The issuance and custody of PayPal USD are handled by Paxos Trust Company in New York. Since its launch in August of last year, around $200 million worth of PYUSD has been issued, a significantly lower amount compared to the market cap of USD Coin (USDC) at $32.9 billion and Tether (USDT) at $110 billion. Jose Fernandez da Ponte, Senior Vice President of PayPal’s Digital Currency Group, expressed the company’s aim to establish PYUSD as a stable value that maximizes user confidence and ensures its utility for commerce and payments.
Coincidentally, on the same day, Ripple announced its plans to launch its own stablecoin backed by the U.S. dollar, entering into the $150 billion stablecoin market. Additionally, Nick van Eck, son of investment management expert Jan van Eck, is preparing to introduce a new U.S. dollar-backed stablecoin after successfully closing a $12 million funding round on April 3.
For more information on PayPal USD and how it functions, please refer to the related content.