PayPal is expanding its services for U.S. users by enabling them to transfer money internationally to family and friends using U.S. dollars converted from its local stablecoin, PayPal USD (PYUSD). Through its Xoom platform, users can now send funds to over 160 countries without incurring transaction fees when using PYUSD as the funding source. This move provides a convenient and reliable option for U.S. users to send money abroad, with PYUSD being converted to USD without crypto sales fees for the sender.
Transactions made through this service allow funds to be transferred to various destinations, including foreign recipients' bank accounts, mobile wallets, or financial institutions for withdrawal. However, conversions for transactions not in U.S. dollars will involve currency exchange, which includes applicable spreads. This service is accessible to all U.S. users except those residing in Hawaii, where state regulations prohibit the holding of cryptocurrencies through PayPal.
The issuance and custody of PayPal USD are managed by Paxos Trust in New York. Since its launch in August, PYUSD has seen an issuance of nearly $200 million. While this amount is substantial, it pales in comparison to other stablecoins like USDC and Tether, which boast market capitalizations of $32.9 billion and $110 billion, respectively. Jose Fernandez da Ponte, senior vice president of PayPal’s Digital Currency Group, emphasized the company's aim to ensure PYUSD maintains stable value, instilling user confidence and enhancing its utility for commerce and payments.
In a parallel development, Ripple revealed its plans to introduce its own U.S. dollar-backed stablecoin, entering the competitive $150 billion stablecoin market. This move underscores the growing demand for stablecoins and their role in facilitating various financial transactions. Additionally, Nick van Eck, backed by a $12 million funding round, is set to launch a new U.S. dollar-backed stablecoin, further diversifying the stablecoin landscape and offering users additional options for conducting digital transactions.
