PayPal (PYPL.O) announced a US dollar stablecoin on Monday in an effort to increase the use of digital currencies for payments and transfers.
According to the corporation, the stablecoin, known as PayPal USD, will be issued by Paxos Trust Co and will be backed by US dollar deposits and short-term US Treasury bonds.
PayPal’s stock increased 1.4% to $63.66.
Stablecoins are cryptocurrencies meant to be immune to the wild volatility that makes digital assets difficult to utilize for payments or as a store of value.
PayPal USD is a dollar-pegged currency that will be gradually made available to the company’s users in the United States, according to the digital payments company.
A US congressional committee failed to reach an agreement last month on a bill to establish a federal regulatory framework for stablecoins.
Visa (V.N) announced in 2021 that it will allow the cryptocurrency USD Coin to be used to settle transactions on its payment network.
