PYUSD has just integrated the assets of the Eco Account. This means that now, when you invest there, a portion of your portfolio consists of PYUSD placed in liquidity pools.
In this article, we explore in detail what the PYUSD stablecoin is, how it works, benefits, and future developments.
Launched in August 2023 by the global payments giant to 430 million users, PYUSD offers a secure and stable alternative to traditional currencies.
PYUSD is a stablecoin, which means that 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 provide price stability for users.
PYUSD is worth 1 USD (+/- 0.50%) and is 100% guaranteed by dollar deposits, US Treasuries, and cash equivalents.
It is the only stablecoin supported by the PayPal network. For now limited to American users, it can be used to:
Simply put, users can exchange their US dollars for PYUSD at a fixed exchange rate and use them to transact on the PayPal platform. When they want to withdraw funds, they can exchange their PYUSD for US dollars at any time, ensuring the liquidity of the stablecoin.
This stablecoin benefits from the company's experience in large-scale payments combined with the flexibility and speed of blockchain.
Launched on August 7, 2023 with a first issue of 44 million PYUSD, it is experiencing rapid growth: as of May 13, 2024, there were 378 million PYUSD in circulation, i.e. a capitalization of 378M USD. Daily trade volumes vary between 5M USD and 20M USD.
PYUSD is an ERC-20 token issued on the Ethereum blockchain, i.e. it uses the most common technology on the main global blockchain. So it can be transferred easily.
The issuance and custody of PYUSD are carried out by a PayPal partner, the company Paxos Trust Company, based in the United States and regulated by the New York State Department of Financial Services. Each month, the Commission publishes a detailed report on the reserves that constitute the financial guarantees of PYUSD (access Paxos monthly reports), as well as a certificate issued by an independent audit firm.
As PYUSD is an ERC20 token, it allows developers to integrate PayPal payment solutions into Web3 applications. It is compatible with numerous “exchanges” (digital asset exchanges), decentralized applications (DApps) and NFT marketplaces.
It helps developers create new ways to connect traditional finance to the blockchain ecosystem, allowing for new use cases and opening the ecosystem to new users.
The former CEO of PayPal, Dan Schulman, thus recalled the challenges associated with the creation of PYUSD:
” The move to digital currencies requires an instrument that is stable and easily connected to a fiat currency like the US dollar. Our commitment to responsible innovation and compliance, as well as our ability to provide new experiences for our customers, form the basis for driving the growth of digital payments through PayPal USD. ”
An easy way to take advantage of the rise of PYUSD is to place money on your Eco account, by simple transfer in euros. You don't have to do anything else and you get a daily return. A portion of your investment consists of PYUSD that we previously purchased and then placed in liquidity pools and return protocols.
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