PayPal makes first business transaction using its Stablecoin
PayPal successfully made its first business transaction using its proprietary token, PYUSD, on Thursday, Bloomberg reported. The goal of this transaction was to show how digital currencies such as PayPal's U.S. dollar-pegged stablecoin can be used to improve frequently difficult commercial transactions.
Stablecoins are digital currencies that are typically intended to track one standard currency to another. PYUSD tracks the US dollar and has a current market capitalization of nearly $700 million.
PayPal settles invoice with EY using PYUSD stablecoin
On September 23, PayPal used PYUSD, the stablecoin the company introduced last year, to pay an invoice to Ernst & Young LLP. The payment was made through an SAP SE platform. However, the amount of the invoice was not disclosed to the public.
Jose Fernandez da Ponte, senior vice president of PayPal's blockchain, cryptocurrency, and digital currency group, said that although the benefits of stablecoins for consumers frequently take center stage in discussions, this payment illustrates other applications for the digital currencies.
Due to the necessary reliance on third parties, business-to-business transactions, particularly those involving cross-border transactions, can be drawn out, costly, and sometimes risky.
Business owners adopting stablecoin payments
In areas where access to traditional bank accounts may be restricted or unreliable, or where local currencies may be unstable as a result of rapid inflation, stablecoins have become essential for enabling faster, less expensive, and more secure payment transactions.
Stablecoins like Tether have long been used by some businesses to pay one another, especially when cross-border payments were required. Some businesses prefer to hold stablecoins, especially in countries where traditional currencies are volatile. Payments with stablecoins may lead to faster settlement. The option has become more and more popular as service providers work to make it easier for businesses to use the tokens.
PayPal allows US business accounts trade crypto
The payment platform announced last month that it will allow merchants in the United States to purchase, hold, and sell cryptocurrencies from their business accounts.
US retailers are now able to send cryptocurrency via chain to externally approved wallets via PayPal. Paying and receiving tokens for supported cryptocurrencies to and from external blockchain addresses is now possible for PayPal business account holders.
BVNK introduces Swift payments for stablecoin and fiat transfers
BVNK, a payments provider that supports PayPal's stablecoin, began allowing businesses to transfer US dollars to its platform through the Swift global banking system earlier this year. From there, businesses could pay their clients and partners globally using stablecoins. Additionally, businesses that use BVNK's cryptocurrency payments gateway can easily convert stablecoin earnings into USD or EUR and send those funds to their bank accounts via Swift.
Although there are many benefits to using digital currencies for both consumers and businesses, the crypto industry has come under fire since Sam Bankman-Fried and his FTX exchange collapsed in 2022.
PYUSD sees sharp decline in market cap
The market capitalization of PayPal's stablecoin PYUSD, which debuted last year with a lot of promise, has sharply declined. The market capitalization of PYUSD is currently approximately $695 million, although it exceeded $1 billion in August, according to data from CoinMarketCap.
With market capitalization in the tens of billions of dollars, Tether's USDT and Circle's USDC—the two leading USD-pegged stablecoins—are both considerably larger than PYUSD.
PayPal increasing utilization of its stablecoin PYUSD
The payments firm has been very active lately, regularly announcing new partnerships and initiatives meant to expand its division for digital assets and encourage more users to use its PYUSD stablecoin.
PYUSD stablecoin was listed for trading on OKX's platform on October 3, the company announced. Call auctions for PYUSD started at 11 a.m. and ended at 12 p.m. GMT, according to the exchange, with spot trading starting right away. Users cannot withdraw their stablecoin until October 4, at 10 a.m. GMT, the post added.
OKX's decision is in line with PYUSD's increasing uptake in recent months. With the addition of PYUSD earlier this week, users in supported countries—except from Canada—can now buy stablecoin with any major payment method through MoonPay.
Disclaimer: This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.