What is PayPal USD (PYUSD)?
PYUSD is the next big thing in the world of digital currency, as it becomes the first stablecoin backed by US Dollar deposits, in a move from a major US financial institution.
The coin was launched by PayPal through the Paxos trust company in August 2023 as an ERC-20 tokenized dollar and is a great leap forward in normalizing the use of crypto among the general public, given the credibility of the institution that has launched it and the fact that it is backed by US Dollar reserves.
Like any other crypto asset, PYUSD presents its users with the ability to move their money anywhere in the world at any time and is programmable as well, but with the competitive edge of being stable.
About PayPal
In essence, PayPal is an option available to consumers, merchants, and business owners to do financial transactions.
PayPal offers its services through a website as well as a mobile app. In addition, PayPal also offers its users debit cards, credit card readers, and lines of credit to further facilitate their financial needs.
It is one of the quicker ways to do financial transactions as it allows the users to transfer funds within minutes and ensure those funds are available at the receiving end for use or withdrawal immediately.
PayPal first came into the limelight as the preferred mode of transactions for buyers and sellers on eBay. eBay then bought PayPal, making it its official payment system in 2002, until 2015 when PayPal became an independent company with company shares trading under the symbol PYPL on Nasdaq.
Over the years PayPal has acquired many companies to expand and diversify the financial services it offers, including brands like Zettle, Hyperwallet, Xoom, Paidy, and Chargehound.
Why Did PayPal Create PYUSD?
PYUSD is PayPal’s attempt at moving towards domination in the cryptocurrency space, as it introduces a stablecoin, reducing the risk associated with cryptocurrency, and encouraging more people to shift to cryptocurrencies.
In an interview with the Cointelegraph, a PayPal spokesperson explained that the future of digital financial services was due for an upgrade in its technological infrastructure, and in order to help people adapt and engage in this space, PayPal has taken the step to create a coin that takes price volatility out of the question for transactions in digital currencies.
There is no doubt that digital currencies are the future of finance and this launch of a stablecoin by a major US financial institution shows that those circles accept this and are ready to adapt to this new reality.
How Does PYUSD Work?
What is Stablecoin?
As mentioned earlier, PYUSD’s biggest strength is the fact that it is a stablecoin. But what exactly is that and how does it work? Essentially, a stablecoin is a type of cryptocurrency whose value is tied to a separate asset class, in order to reduce volatility and keep a steady value. The strongest of the stablecoins are those tethered to fiat currencies, such as the US dollar.
The PYUSD is backed by the US Dollar 1:1 and its funds are protected, audited, and regulated by the Paxos Trust Company, meaning it is very safe.
PYUSD coins are redeemable in US dollars through the process available on the Paxos website, or via third-party P2P platforms where it is supported.
How Does PYUSD Maintain Stability?
Cryptocurrencies, even the most popular ones like Bitcoin, are known for being extremely volatile in terms of their value.
An example is how the value of Bitcoin rose from $5000 in March 2020 to over $63000 in April 2021, followed by a downtrend in value by nearly 50% over the next two months. This kind of volatility not only scares off buyers, sellers, and merchants from opting for digital currency, but it also hinders the overall expansion and normalization of digital currencies.
Stablecoins like PYUSD fix this issue by reducing volatility in value by tethering it to a different asset class, making them a more preferred medium of exchange. This is done by maintaining a reserve of fiat currency or other assets, such as Gold, Silver, or crude oil, as collateral to provide stability to the cryptocurrency.
PYUSD is a fiat-collateralized cryptocurrency, meaning that there is a fiat currency reserve supporting its value, which is independently audited regularly.
What’s the Relationship Between PYUSD and Paxos?
Paxos is the trust company that issues PayPal’s PYUSD along with other stablecoins such as the USDP.
Their vision is to, “open the world’s financial system to everyone,” while their mission is to, “enable the instant movement of any asset to anyone, in a trustworthy way.” They seek to do this through their blockchain infrastructure platform, offering clients a safe environment built on top of existing financial regulatory systems.
Advantages of PYUSD
Trust and Credibility
PayPal is a titan in the global financial market and this reputation alone will help buyers and sellers of the PYUSD be a lot more confident in their choice.
Add the fact that it is backed by the US dollar and PYUSD becomes an extremely stable option for even those who are beginners to the world of cryptocurrencies.
Stability
As previously explained PYUSD is backed by the US Dollar as its fiat collateral, making it a fairly safe option for conducting cross-border transactions, and buying goods and services at minimal transaction costs.
Integration
A big challenge for the expansion and normalization of digital currencies has been the barrier between traditional financial structures and the web3 ecosystem.
Being part of the existing global system of PayPal, PYUSD overcomes this barrier, allowing users to seamlessly transfer from fiat to digital in their online transactions.
Other notable stablecoins such as Tether do not enjoy this luxury, giving PYUSD an edge in this market.
Web3 Compatibility
Along with benefiting from PayPal’s decades of experience in online transactions and payments on a large-scale, PYUSD also offers its users the flexibility to do transactions with external developers, wallets, and web3 applications. PYUSD is an ERC-20 token, issued on the Ethereum blockchain making it viable for transactions in the web3 ecosystem.
Risks of PYUSD
Centralized Control
One of the major risks associated with PYUSD is centralized control.
This, according to the company, is implemented to protect users against fraudulent activities and loss. However, this level of control, where the owner has the complete power to pause and freeze all transactions and addresses, goes against the very promise of a digitized financial system, which is a decentralized economy.
The level of control also raises the question of whether users should place their trust in such entities in the first place, as they seem to be more in control of how you make transactions.
Furthermore, this level of control over supply creates risk of manipulation, which is a major concern for users.
Outdated Codes
The language used for coding the PYUSD is an extremely old version of Solidity, an Ethereum-based programming language.
Using such a language carries the risk of having known exploits, which can be vulnerable to attacks and lead to significant financial losses.
Regulatory Implications
One of the biggest plus points of the PYUSD is ironically also one of the greatest risk factors attached to it. The fact that this coin is supported by PayPal has its obvious advantages in terms of integration, but it also means that this stablecoin will be under the microscope of regulatory bodies to ensure PayPal does not have excessive influence on this market and impact competitiveness.
Comparisons of PYUSD
USDT vs PYUSD
Like the PYUSD, USDT is also a stablecoin launched by Tether, which aims to provide users with the safety and transparency of fiat collateral in digital currency. Tether is often regarded as the first stablecoin in the market, and is also highly liquidated when it comes to USD Pegged Coins.
Compared to PYUSD, USDT is more decentralized in the way that it is not backed and controlled by a centralized financial platform. Instead, Tether, an independent company, is responsible for its day to day business.
While PYUSD is only available on ERC-20 network as of now, USDT is accessible on more than ten blockchain protocols, including Ethereum, Binance Smart Chain, Tron, Solana, Polygon and many more.
USDC vs PYUSD
USDC is another prominent name in the crypto space, and is pegged to USD Dollar at 1:1 ratio. While Paxos is responsible for managing PYUSD reserves, USDC is managed by a company called CENTRE, an organization backed by one of the top crypto exchanges, Coinbase, and Fintech Brand Circle.
For those who don’t know about CIRCLE, it is a licensed financial payment service provider like PayPal. As PYUSD makes its entry into the digital currency market, it will be interesting to see how it competes with coins like the USDC.
DAI vs PYUSD
DAI is the digital currency launched by MakerDAO, which claims to be the world’s first unbiased currency, allowing people from anywhere to get access to digital currency. Like the PYUSD it is also a stablecoin and is redeemable 1:1 in US Dollars. Currently, it is integrated in more than 400 apps and services, however unlike PYUSD it does not have centralized control, instead a community of MKR token holders and DAO govern the smart contracts.
How To Get PYUSD
Just like other stablecoins, PYUSD will also be available on all exchanges for trading with different pairs, including with stablecoins like USDT, Altcoins, and BTC. Hence, users interested in acquiring PYUSD can purchase it from supported exchanges.
Future of PayPal USD (PYUSD)
The future of PayPal’s PYUSD remains uncertain, as the coin received a mixed reaction from crypto proponents after its release. There is no doubt of the potential for integration and expansion that comes with a giant like PayPal entering the crypto space. However, the higher transaction costs and the nature of centralization, similar to that of non-digital currencies, have raised questions over whether PYUSD is the way to go in the future.
Conclusion
In the end, I would say, PYUSD has all the ingredients to stay above in the competition because of its strong backing and potential to be integrated not only in decentralized, but also centralized financial infrastructure.
However, it has yet to be seen what the crypto-community verdict will be on this trend of deeply centralized digital currencies and how they will react to it. At the moment, it seems that the PYUSD will give tough competition to its rivals, particularly within the US financial ecosystem, as it will be the safer and more reliable choice for new crypto users.
We Coin-Labs.com provides only objective information about PayPal USD.
Therefore, we are not responsible for the investment decision in PayPal USD and the resulting loss.
PayPal USD Basics
Here are some factors that investors should consider before investing in PayPal USD.
| Cryptocurrency Features | PayPal USD (PYUSD) |
|---|---|
| Publisher or Developers | PayPal |
| Headquarters (Registration Number) | USA |
| Symbol | PYUSD |
| Platform | Ethereum |
| Published Date (CMC Registration) | 2024-11-01 |
| Max Supply | No limit |
Reliability Score of PayPal USD in 2024
These are indexes mesuring the investment reliability of PayPal USD conducted by Coin-Labs.com.
| Investment Reliability Rating Items | Scores and Current Status |
|---|---|
| Company Activation Rate | / 10.0 CAR |
| Communication Rate | / 10.0 CR |
| Technology Transparency Rate | / 10.0 TTR |
| Development Participation Rate | / 10.0 DPR |
| Listing Status on the World's Top 10 Exchanges | Listed on 3 Exchanges |
| Number of Available Pairs Worldwide | 90 Pairs |
| Market Cap of the Cryptocurrency | 300,985,675 USD (Rank #149) |
The table above shows the result of investment suitability evaluation for PayPal USD.
Check out how we evaluate cryptocurrencies on the crypto rating description page.
PayPal USD Price
Here are the price and recent trading volume of PayPal USD. (Data of 2024-11-02 00:35:00)
| Price Items | Price and Trading Volume of PayPal USD |
|---|---|
| PayPal USD Price | 1.000 USD |
| Price Change 24h | 0.09% |
| Price Change 7d | 0.00% |
| Trading Volume 24h | 18,680,343 USD |
| Trading Volume Change 24h | -63.81% |
Cryptocurrency Metadata
You can check the development status and social media information of PayPal USD through the links in the table below.
| Metadata Source | URL |
|---|---|
| 🌎 Official Website | https://www.paypal.com/pyusd |
| 📖 White Paper | |
| 🛰️ Source Code (GitHub) | |
| https://twitter.com/PayPal | |
| 🎺 Message Board |
Where to Buy PayPal USD
Here are the top ten world crypto exchanges where traders can buy PayPal USD in 2024.
| Top10 Exchanges | Listed Status | Page URL |
|---|---|---|
| Binance | Not listed | |
| Coinbase | Listed | https://pro.coinbase.com/trade/PYUSD-USD |
| Kraken | Listed | https://trade.kraken.com/charts/KRAKEN:PYUSD-USD |
| KuCoin | Not listed | |
| Bitfinex | Not listed | |
| OKX | Not listed | |
| Huobi | Not listed | |
| Bitstamp | Not listed | |
| Bybit | Not listed | |
| Gate.io | Listed | https://www.gate.io/trade/PYUSD_USDT |
Frequently Asked Questions
What is the current price of PayPal USD?
PayPal USD price today is 1.000 USD. Furthermore, the price of PayPal USD has fluctuated by 0.09% from 24 hours ago, and by 0.00% from a week ago.
Where is PayPal USD listed?
Currently, it is listed on a total of 3 among the world top 10 exchanges.
What is the market cap of PayPal USD now?
Currently, PayPal USD has a market cap of 300,985,675 USD, which is ranking 149 among cryptocurrencies worldwide.
How much is the trade volume of PayPal USD?
Currently, 570,851,729 PYUSD coins are circulating through 90 market pairs. As a result, in the last 24 hours, 18,680,343 USD of PYUSD coins were traded in the market.
