2024-04-05
PayPal's recent announcement regarding the expansion of its money transfer services has generated significant interest and excitement.
The company has revealed that it will allow all United States users outside the state of Hawaii to fund money transfers to family and friends abroad using U.S. dollars converted from its native stablecoin, PayPal USD (PYUSD).
This move is expected to revolutionize cross-border transactions and provide greater convenience for users.
The service, powered by PayPal's Xoom, enables users to send money transfers via PYUSD to over 160 countries without incurring any transaction fees. This development is a significant step forward in facilitating international money transfers for PayPal users, as it offers a simple and reliable method for sending money abroad using PYUSD as a funding source.
When a user selects the option to fund a cross-border money transfer with USD converted from PYUSD, Xoom will convert the PYUSD in the user's PayPal Cryptocurrency Hub into USD currency, with no crypto sale fee.
Recipients will receive the funds in the fiat currency of their choice, further enhancing the flexibility and accessibility of the service.
The service allows funds to be sent abroad to a recipient's bank account, mobile wallet address, or a financial institution for pickup.
However, it is important to note that transactions not denominated in U.S. dollars will be subject to currency conversion, which includes a spread. Despite this, the introduction of this service will undoubtedly simplify and streamline the process of international money transfers for PayPal users.
It is worth mentioning that all U.S. users, except those in Hawaii, can utilize this service. The state of Hawaii has specific regulations prohibiting the holding of cryptocurrencies with PayPal, hence the exclusion.
However, for users across the rest of the United States, the option to fund money transfers using PYUSD opens up new possibilities and enhances the overall user experience.
The issuance and custody of PayPal USD are handled by Paxos Trust Company in New York. Since its launch in August, close to $200 million worth of PYUSD has been issued.
While this number may seem modest compared to other stablecoins like USD Coin (USDC) and Tether (USDT), which have market caps of $32.9 billion and $110 billion respectively, PayPal remains committed to creating a stable value for PYUSD to maximize user confidence and ensure its utility for commerce and payments.
Interestingly, Ripple also made an announcement on the same day, stating its intention to launch its own U.S. dollar-backed stablecoin to compete in the $150 billion stablecoin market. This development signifies the growing recognition and adoption of stablecoins as a reliable form of digital currency.
In addition, Nick van Eck, the son of investment management expert Jan van Eck, is set to launch a new U.S. dollar-backed stablecoin after closing a $12 million funding round.
This further emphasizes the increasing interest and investment in stablecoins, indicating their potential to revolutionize the financial industry.
