PayPal launches its own PYUSD crypto coin
PayPal is launching its own digital coin with plans to become the leading private issuer of stablecoins in the future. The token is called PayPal USD and the stock ticker is PYUSD. The rate of the crypto coin is pegged to the US dollar.
According to Dan Shulman, CEO of the company, the service plans to strengthen its dominant position in the field of digital operations. Which is logical, because in 2022, against the backdrop of declining interest in online transactions, which were popular during the pandemic, PayPal shares fell by more than 35%.
“The transition to digital currencies requires a stable instrument that is both digital and easily connected to a fiat currency such as the US dollar,” Shulman said.
PayPal wallet owners will be able to exchange PYUSD for US dollars or other digital coins available on the payment service platform. In addition, the stablecoin can be used for purchases using a wallet in Venmo, a mobile application from PayPal.
Initially, it is expected that the stablecoin will be used primarily in the cryptocurrency and Web3 areas, for example, to exchange for other assets, or to make payments in games. And then the use of the token will gradually spread to areas such as transfers of funds and micropayments.
After PayPal announced the release of its own stablecoin, members of the crypto community criticized the company’s initiative. It turned out that PYUSD at the code level has the “assetProtection” function, which allows the payment system to block funds on customer accounts, or simply erase any number of coins from their balance.
Crypto enthusiasts also had questions about the PayPal USD development algorithms. It turned out that the token was created in a rather old version of Solidity, which allows the company to suspend all operations, as well as freeze addresses at will.
In addition, it turned out that the issuer of PYUSD has the right to unilaterally increase or decrease the supply of a stablecoin by any percentage.
