Crypto Goes Global: PayPal's Stablecoin PYUSD Now Powers Xoom Transfers
Paypal announced that users of its international money transfer service, Xoom, can now leverage the company's stablecoin, PYUSD, to conduct international transactions. PYUSD is a digital asset pegged to the US dollar, aiming to offer price stability for cross-border payments.
How it Works
Users in the US can transfer PYUSD held in their Paypal Cryptocurrency Hub through Xoom. Since transactions are typically processed in currencies other than USD, a foreign exchange rate with a spread will apply.
Why PYUSD?
According to Jose Fernandez da Ponte, senior vice president of blockchain and crypto assets at Paypal, the introduction of PYUSD for international transfers on Xoom addresses two key objectives. Firstly, it offers a stable value to users, minimising concerns about price fluctuations. Secondly, it provides a utility for international commerce and payments.
A PayPal executive stated that this integration aims to “drive mainstream adoption of cryptocurrencies” while also providing users with an affordable and secure way to send money internationally.
Simplified Transaction Process:
When choosing PYUSD as a funding method, Xoom converts the PYUSD to USD within the user's PayPal Cryptocurrency Hub without any crypto sale fees. Recipients receive the funds in the chosen fiat currency, ensuring a smooth transaction experience.
PYUSD Faces Challenges
While this is a positive development for PYUSD, the stablecoin faces some challenges. Firstly, PYUSD’s market capitalization is significantly lower than that of leading stablecoins USDT and USDC. Secondly, unlike its competitors, PYUSD’s supply has shrunk by 18.8% over the last month.
Looking Ahead
The integration of PYUSD on Xoom signifies Paypal's commitment to exploring blockchain technology and its potential to streamline international financial transactions. While still in its early stages, this move paves the way for a future where crypto plays a more significant role in global money transfer.
