PayPal rolled out its most-awaited stablecoin, PYUSD, in August 2023. It became the first leading FinTech firm to do so. The fiat-backed stablecoin, which is intended to maintain a $1 price, aims to improve the user experience of over 400 million PayPal customers by offering quicker transactions at low costs.
Although other stablecoins have been launched before PYUSD, PayPal’s worldwide recognition gives its stablecoin a competitive edge over its rivals. At the time of the PYUSD launch, the crypto market experienced a brief rally, while PayPal’s share prices jumped significantly. In this guide, we will be exploring PYUSD’s use cases and how you can buy the stablecoin.
Exploring PYUSD
As mentioned earlier, PYUSD is a fiat-backed stablecoin, meaning PayPal holds dollars equivalent to the circulating supply to ensure each token is fully backed. PYUSD is pegged to USD, thus shielding users from high volatility experienced in non-backed cryptocurrencies like Ethereum and Bitcoin.
Three Major Innovations Introduced by PYUSD
Firstly, PYUSD is the first crypto asset to have been integrated into PayPal’s payment processing infrastructure, paving the way for merchants and consumers across the world to use a stablecoin for their transactions conveniently.
Secondly, being a regulatory-compliant stablecoin, PYUSD establishes reliability and trust, giving it an edge over most stablecoins, which remain unregulated. PayPal’s cryptocurrency is regulated by the New York State Department of Financial Services. Moreover, PYUSD is issued by a regulated stablecoin issuer, Paxos Trust Company.
Thirdly, PYUSD is an ERC-20 token running on Ethereum, the blockchain known for hosting the most decentralized finance apps. Since the stablecoin is built using the ERC-20 standard, it allows Web3 developers to integrate it into their DeFi apps, making it possible for PYUSD holders to explore opportunities in the decentralized finance world.
PYUSD’s Use Cases
Here are some of the use cases of PayPal’s stablecoin:
- P2P Payments: You can send PYUSD to your family and friends, making transactions faster and cheaper.
- Cryptocurrency Conversions: PYUSD streamlines transitions between crypto assets since you can convert it to any of PayPal’s supported digital assets.
- Payment of Purchases: Paying for online purchases using PYUSD is now possible. Simply select the stablecoin at any checkout point.
PayPal continues to explore more use cases for its stablecoin. The giant payment processor intends to make PYUSD a key component of the Web3 world. PayPal believes its stablecoin can be a key bridge between traditional finance and blockchain innovations.
How to Purchase PYUSD
So, where can you buy PYUSD? The stablecoin is available on several regulated crypto exchanges like Kraken and Coinbase. Moreover, you can purchase it on the PayPal platform. In this guide, we will show you how to purchase PYUSD on Coibase and PayPal.
A Step-by-Step Guide to Buying PYUSD on Coinbase
Step 1: Go to coinbase.com/wallet and download the crypto exchange’s non-custodial wallet. This allows you to buy and hold PYUSD yourself.
Step 2: Store safely the 12-word phrase provided to you when creating a Coinbase Wallet account. You will need it to access your PYUSD in case you forget your password.
Step 3: Fund your wallet with some ETH to buy PYUSD and cover network fees. You can buy these tokens from Coinbase or any regulated crypto exchange listing Ethereum.
Step 4: After depositing ETH tokens in your Coinbase Wallet, use the Swap feature within the app to convert your ETH to PYUSD. To do this, enter the number of ETH tokens you wish to swap for PYUSD. Coinbase Wallet will display the gas fee to be incurred and the amount of PYUSD you will receive. If satisfied, click “SWAP” to get your PayPal stablecoin. The transaction takes a few seconds.
A Step-by-Step Guide to Buying PYUSD on PayPal
Step 1: Deposit fiat money into your PayPal account.
Step 2: On the PayPal platform, click Crypto” and choose PYUSD.
Step 3: Enter the amount of fiat you wish to spend on PYUSD.
Step 4: Check the transaction details and click “Buy” to receive PYUSD in your PayPal wallet.
Final Thoughts
It is evident that PYUSD has streamlined the transaction process within PayPal’s infrastructure. The stablecoin’s success is likely to encourage more traditional finance companies to integrate cryptocurrencies into their payment processing systems.
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