PayPal launches stablecoin in crypto push

San Jose, (Reuters): Payments firm PayPal on Monday launched a U.S. dollar stablecoin in a bid to boost the adoption of digital currencies for payments and transfers.

The stablecoin, known as PayPal USD, is backed by U.S. dollar deposits and short-term US Treasuries, and will be issued by Paxos Trust Co, according to the company.

PayPal’s shares rose 1.4 per cent to $63.66.

Stablecoins are cryptocurrencies designed to be protected from the wild volatility that makes it difficult to use digital assets for payments or as a store of value.

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PayPal USD is pegged to the dollar and will gradually be available to the company’s customers in the United States, the digital payments firm said.

Last month a U.S. congressional committee failed to come to an agreement on a bill to establish a federal regulatory framework for stablecoins.

Visa said in 2021 that it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.