PayPal has taken a major step in digital payments by teaming up with Xoom to use its stablecoin, PayPal USD ($PYUSD), for cross-border money transfers.
This partnership focuses on improving international payments, particularly in regions like Asia and Africa, where access to banking can be limited.
The initiative is designed to make global transactions faster, more efficient, and accessible to more people.
PayPal hopes that $PYUSD will become a reliable option for people who need to send or receive money across borders.
Making global payments easier
PayPal introduced $PYUSD in 2023 as a stablecoin backed by the US dollar. This means that for every $PYUSD, there is a real dollar held in reserve.
The coin is regulated by Paxos Trust Company, a trusted name in the cryptocurrency world.
One of the key goals of this initiative is to overcome the limits of traditional banking.
Banks often have restricted operating hours and can be slow when it comes to international transfers. $PYUSD allows people to send money anytime, anywhere, without waiting for banks to open.
Chris Maurice, CEO of Yellow Card, one of the companies working with PayPal on this project, explained its impact:
“Stablecoins like PYUSD are transforming the global payments landscape, and thanks to our integrated infrastructure and technology, users will be able to move money more efficiently.”
Other partners in the project include Cebuana Lhuillier, which helps manage local payments in certain markets.
These collaborations aim to improve access to financial services in areas where banking options are limited, ensuring that people in emerging economies benefit from this technology.
Building a stronger ecosystem
$PYUSD is built on the Ethereum blockchain, which means it is compatible with many popular digital wallets, apps, and crypto exchanges. This makes it easy for businesses and developers to use $PYUSD in their own systems.
In 2024, PayPal introduced several initiatives to encourage the use of $PYUSD. One of these was a partnership with Anchorage Digital, which offers a rewards program for holding $PYUSD.
Customers can earn benefits simply by keeping their $PYUSD balance, which is designed to build trust and attract more users.
PayPal also partnered with MoonPay, a Web3 infrastructure provider, to make buying cryptocurrencies easier for PayPal users.
People can now use their PayPal accounts to buy digital currencies, making it more convenient for users who are new to crypto.
Another important step was integrating $PYUSD with the Solana blockchain. Solana is known for its fast transactions and low costs, making it ideal for people who want to use $PYUSD frequently.
PayPal worked with Crypto.com, Phantom, and Paxos to bring $PYUSD to this network, giving users even more options.
These efforts show that PayPal is not just promoting $PYUSD but also creating an ecosystem where the stablecoin can thrive.
By making $PYUSD compatible with different platforms and blockchains, PayPal is expanding its potential use cases.
Facing tough competition
Despite its efforts, $PYUSD faces strong competition in the stablecoin market. Tether’s $USDT and Circle’s $USDC dominate the space with market capitalisations of $128 billion and $37 billion, respectively.
These stablecoins have been around longer and are widely used for payments and trading.
PayPal acknowledges that it still has a long way to go in building $PYUSD’s user base and increasing transaction volumes. However, the company is confident that its global reach and innovative technology will help it compete.
“Stablecoins are gaining more relevance in the global financial landscape”, PayPal said in a statement. The company is relying on its partnerships and a secure, scalable system to grow $PYUSD’s adoption.
With more people turning to digital payments, stablecoins like $PYUSD have the potential to play a bigger role in the future of money.
PayPal’s efforts to make $PYUSD widely available, accessible, and easy to use could position it as a serious competitor in the market.
