PYUSD has just been added to the eco Account. This means that from now on, when you make an investment there, part of your portfolio will be made up of PYUSD placed in liquidity pools.
In this article, we explore in detail what PYUSD stablecoin is, how it works, its benefits and future developments.
A 100% asset-backed USD stablecoin
Launched in August 2023 by the global payments giant with 430 million users, PYUSD offers a secure and stable alternative to traditional currencies.
PYUSD is a stablecoin, meaning it is designed to maintain a stable value against a fiat currency, in this case the US dollar. Unlike other cryptocurrencies such as Bitcoin, whose value can fluctuate considerably, stablecoins are designed to minimize this volatility and offer price stability to users.
PYUSD is worth 1USD (+/- 0.50%) and is 100% backed by dollar deposits, US Treasury bills and cash equivalents.
Facilitating PayPal payments
It is the only stablecoin supported by the PayPal network. Currently limited to US users, it can be used for :
- buy products online,
- buy, sell, exchange other currencies supported by PayPal,
- transfer money to other compatible wallets.
In simple terms, users can exchange their US dollars for PYUSD at a fixed exchange rate and use them to make transactions on the PayPal platform. When they wish to withdraw funds, they can exchange their PYUSD for US dollars at any time, guaranteeing the stablecoin’s liquidity.
This stablecoin benefits from the company’s experience in large-scale payments, combined with the flexibility and speed of blockchain.
Capitalization and trading volumes
Launched on August 7, 2023 with an initial issue of 44 million PYUSD, it is growing rapidly: as of May 13, 2024, there were 378 million PYUSD in circulation, representing a capitalization of 378M USD. Daily trading volumes vary between 5M USD and 20M USD.
The most widespread technology
PYUSD is an ERC-20 token issued on the Ethereum blockchain, meaning it uses the most common technology on the world’s leading blockchain. It can therefore be easily transferred.
PYUSDs are issued and held by PayPal’s partner, the US-based Paxos Trust Company, regulated by the New York State Department of Financial Services. Each month, the company publishes a detailed report on the reserves that constitute the financial guarantees of the PYUSD(access Paxos monthly reports), together with a certificate issued by an independent auditing firm.
New uses
As PYUSD is an ERC20 token, it enables developers to integrate PayPal payment solutions into Web applications3. It is compatible with many exchanges, decentralized applications (dApps) and NFT marketplaces.
It helps developers create new ways of connecting traditional finance to the blockchain ecosystem, enabling new use cases and opening up the ecosystem to new users.
The former CEO of PayPal, Dan Schulman, had thus recalled the stakes involved in the creation of PYUSD:
“The shift to digital currencies requires a stable instrument that is easily connected to a fiat currency like the US dollar. Our commitment to responsible innovation and compliance, as well as our ability to offer new experiences to our customers, provide the foundation to drive the progression of digital payments through PayPal USD. “
How to profit from the development of PYUSD
A simple way to take advantage of the PYUSD boom is to place money in your eco Account, by simple transfer in euros. You don’t have to do anything else, and you receive a daily return. Part of your investment is made up of PYUSD that we have previously purchased and placed in liquidity pools and yield protocols.
