PayPal launches USD stablecoin in 70 markets

[SINGAPORE] PayPal announced on Tuesday (Mar 17) that it has made its US dollar-backed stablecoin PayPal USD (PYUSD) available across 70 markets, including Singapore.

This follows PYUSD’s initial launch in the US in 2023, which was to introduce PayPal customers and merchants to cryptocurrencies as a utility, said May Zabaneh, senior vice-president and general manager of crypto at the American fintech firm.

The reason the company went into crypto is that it is “a good engagement play”, she told The Business Times. “It enhances and adds additional reasons for people to come to the app, people to engage, people to have a trusted relationship.”

The stablecoin will allow users to make cross-border transfers in US dollars instantaneously, at much lower fees compared with those for wire transfers. Wire transfers typically cost a few percentage points of the transaction value, while a stablecoin transfer can be made for fractions of a cent.

Also, not all PayPal markets allow users to hold a balance or make a transfer in US dollars. Using PYUSD will remove these constraints in the 70 markets.

The platform allows one-to-one conversion, whereby US$1 is equivalent to one PYUSD and vice versa, before and after the transfer.

PYUSD has the option to be transferred to third-party digital wallets outside of the PayPal ecosystem. Users can then use other crypto exchanges such as OKX to convert the stablecoin to fiat currency.

“It’s a bit more open and interoperable than the PayPal balance that somebody would receive,” noted Zabaneh.

In Singapore, only those with PayPal business accounts can make transactions with the stablecoin. Also, users in markets outside the city-state and the UK will be able to earn rewards on their PYUSD holdings.

Payments across borders

PYUSD currently has a market cap of US$4 billion, and PayPal is doubling down on its payment aspect. The initial launch in the US showed traction, but the cross-border aspect makes it more interesting, added Zabaneh.

For that, PayPal has to integrate the use of PYUSD deeper into payment experiences, laying the foundations for the emerging use case of cross-border payments. Allowing PayPal wallets across the world to utilise the stablecoin will allow such scenarios to materialise.

Transaction volume – a key statistic for payment companies – is the metric Zabaneh will be watching out for with PYUSD. Seeing transaction volumes grow would mean that more people across the world are accessing the stablecoin, and that more utility and payment use cases are emerging.

“We’ll continue (with) the geographical expansion (and), most importantly… the utility aspect, which really is at the heart of driving volume,” she added.