The PayPal released its own stablecoin PayPal USD (PYUSD)

Financial technology company PayPal is launching its own stablecoin for making payments on its network. The PayPal USD (PYUSD) “stablecoin” is issued by Paxos Trust Co.

With the release of the stablecoin, the company will solidify its dominance in digital payments by building on technology that enables instant and cheaper transfers without a centralized intermediary, CEO Dan Shulman said.

The developers claim that the token is fully backed by deposits in US dollars, short-term treasury bonds and similar cash equivalents. It is pegged to the US dollar and will gradually be made available to PayPal customers in the US.

PayPal's stablecoin can be exchanged for US dollars at any time, along with other cryptocurrencies available on the company's network. Owners will also be able to use PYUSD to pay for online purchases, however, on which platforms, it is not indicated. Over time, PYUSD will be available on the PayPal app - Venmo - and other compatible crypto wallets outside of the PayPal ecosystem.

PayPal expects PYUSD to be used primarily in the cryptocurrency and Web3 sectors, such as other digital token trading and in-game payments. Later, the token may spread to other areas, such as money transfers and micropayments.

In February, the media reported that PayPal had suspended the development of its own stablecoin. As a result, the launch of the token had to be stopped indefinitely. However, then PayPal spokeswoman Amanda Miller said that the company did not completely abandon plans for a stablecoin.

This happened after its issuer, Paxos, was under investigation by the New York State Department of Financial Services (NYDFS). At the time, a NYDFS spokesman declined to comment on ongoing investigations, but noted that the department is working extensively to protect consumers from the risks associated with investing in the cryptocurrency market. The exact motives for the investigation were not specified.