Global payment giant PayPal announced the launch of a U.S. dollar-denominated stablecoin which will be available to consumers, merchants and developers to seamlessly connect fiat and digital currencies.

PayPal USD (PYUSD) is backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents.

Eligible U.S. PayPal customers who purchase PayPal USD (PYUSD) will be able to transfer the stablecoin between PayPal and compatible external wallets.

They will also be able to send person-to-person payments using PYUSD, fund purchases with it at checkout, and convert any of PayPal’s supported cryptocurrencies to and from PYUSD.

PayPal USD is issued by Paxos Trust Company, a fully licensed limited purpose trust company subject to regulatory oversight by the New York State Department of Financial Services. In June 2022, PayPal was issued a BitLicense by NYDFS after previously obtaining a conditional BitLicense.

Beginning in September 2023, Paxos will publish a public monthly Reserve Report for PayPal USD that outlines the instruments composing the reserves.

Paxos will also publish a public third-party attestation of the value of PayPal USD reserve assets.

Dan Schulman

“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar.

Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD,”

said Dan Schulman, President and CEO, PayPal.

This article first appeared on Fintech News America.