PayPal
has recently gone under the scrutiny of the United States Securities and
Exchange Commission (SEC) as the Enforcement division issued a subpoena related
to its US dollar-pegged stablecoin. The revelation of the SEC’s action came
to light on November 2, according to a report by Reuters.
This
development occurs approximately three months after PayPal introduced its own US dollar-denominated stablecoin (PYUSD) in early August. PYUSD is issued by Paxos Trust and is backed
by a reserve of US dollar deposits, short-term Treasurys, and similar cash
equivalents. Operating on the Ethereum blockchain, PYUSD has been designed with
the intention of facilitating digital payments and contributing to the Web3
ecosystem.
The
exact nature and focus of the SEC’s inquiry remain undisclosed. However,
regulatory authorities have been scrutinizing stablecoins and their operations
in the United States, emphasizing the need for compliance with existing
financial regulations.
PayPal discloses SEC subpoena tied to stablecoin https://t.co/mrSvn8bgz8 pic.twitter.com/9jiLSqxNZq
— Reuters (@Reuters) November 2, 2023
PayPal
and Paxos Launch PYUSD: The Digital Dollar
Back
in August, Finance Magnates reported
that PayPal
had unveiled PYUSD, in a joint effort
with stablecoin issuer Paxos Trust Company. This digital asset is fully backed
by US dollar deposits, short-term US Treasuries, and similar cash equivalents,
with a 1:1 redemption ratio for US dollars.
Keep Reading
Users
can transfer PYUSD between PayPal and compatible digital wallets, making it
suitable for peer-to-peer transactions and purchases. Furthermore, PayPal USD
users have the flexibility to convert various cryptocurrencies supported on the
platform into PYUSD.
Dan
Schulman, the President and CEO of PayPal, praised the new
offering, emphasizing its role as a stable instrument connecting digital
currencies to fiat, particularly the US dollar. PYUSD operates as an ERC-20
token on the Ethereum blockchain, serving consumers, merchants, and developers
as a bridge between traditional and digital currencies. The company expects it
to gain traction among developers and integrate with wallets and Web 3
applications.
In
a bid for transparency, Paxos plans to issue monthly reports detailing the
financial instruments backing PYUSD, including a third-party confirmation of
their value. This move aligns with growing industry demands for cryptocurrency
exchanges to disclose the financial reserves supporting their stablecoins, as
seen with ‘proof of reserves’ initiatives by exchanges like Binance.
PYUSD
will be available on Venmo, a mobile payments app acquired by PayPal in 2013.
This stablecoin opens up possibilities for PayPal users to engage in digital
asset trading, including Bitcoin, Bitcoin Cash, Ethereum, and
Litecoin.
PayPal
has recently gone under the scrutiny of the United States Securities and
Exchange Commission (SEC) as the Enforcement division issued a subpoena related
to its US dollar-pegged stablecoin. The revelation of the SEC’s action came
to light on November 2, according to a report by Reuters.
This
development occurs approximately three months after PayPal introduced its own US dollar-denominated stablecoin (PYUSD) in early August. PYUSD is issued by Paxos Trust and is backed
by a reserve of US dollar deposits, short-term Treasurys, and similar cash
equivalents. Operating on the Ethereum blockchain, PYUSD has been designed with
the intention of facilitating digital payments and contributing to the Web3
ecosystem.
The
exact nature and focus of the SEC’s inquiry remain undisclosed. However,
regulatory authorities have been scrutinizing stablecoins and their operations
in the United States, emphasizing the need for compliance with existing
financial regulations.
PayPal discloses SEC subpoena tied to stablecoin https://t.co/mrSvn8bgz8 pic.twitter.com/9jiLSqxNZq
— Reuters (@Reuters) November 2, 2023
PayPal
and Paxos Launch PYUSD: The Digital Dollar
Back
in August, Finance Magnates reported
that PayPal
had unveiled PYUSD, in a joint effort
with stablecoin issuer Paxos Trust Company. This digital asset is fully backed
by US dollar deposits, short-term US Treasuries, and similar cash equivalents,
with a 1:1 redemption ratio for US dollars.
Keep Reading
Users
can transfer PYUSD between PayPal and compatible digital wallets, making it
suitable for peer-to-peer transactions and purchases. Furthermore, PayPal USD
users have the flexibility to convert various cryptocurrencies supported on the
platform into PYUSD.
Dan
Schulman, the President and CEO of PayPal, praised the new
offering, emphasizing its role as a stable instrument connecting digital
currencies to fiat, particularly the US dollar. PYUSD operates as an ERC-20
token on the Ethereum blockchain, serving consumers, merchants, and developers
as a bridge between traditional and digital currencies. The company expects it
to gain traction among developers and integrate with wallets and Web 3
applications.
In
a bid for transparency, Paxos plans to issue monthly reports detailing the
financial instruments backing PYUSD, including a third-party confirmation of
their value. This move aligns with growing industry demands for cryptocurrency
exchanges to disclose the financial reserves supporting their stablecoins, as
seen with ‘proof of reserves’ initiatives by exchanges like Binance.
PYUSD
will be available on Venmo, a mobile payments app acquired by PayPal in 2013.
This stablecoin opens up possibilities for PayPal users to engage in digital
asset trading, including Bitcoin, Bitcoin Cash, Ethereum, and
Litecoin.
