Payments giant PayPal has introduced its native stablecoin PYUSD to facilitate cross-border money transfers with no transaction fees. The service, available to US users starting April 4, allows users to convert PYUSD to USD and use it to send money to recipients in 160 countries globally through PayPal’s money transfer platform Xoom. Transactions funded using the stablecoin will have no Xoom transaction fees, making it a cost-effective option for users.
Jose Fernandez da Ponte, PayPal’s crypto senior vice president, highlighted the importance of creating a stable value for increased user confidence and the utility of cryptocurrencies for commerce and payments. The option to fund cross-border money transfers using PYUSD aims to drive mainstream adoption of cryptocurrencies while offering a secure and affordable way to send money to friends and family. This new feature is part of PayPal’s efforts to make cryptocurrencies more accessible and widely used in everyday transactions.
Xoom will convert PYUSD to USD without charging a crypto sale fee when a US user selects the stablecoin for a transaction. The recipient will receive funds in the fiat currency chosen by the sender to ensure a smooth transaction process at both ends. A transaction exchange rate will apply for transactions not completed in USD, offering flexibility and convenience for users sending money internationally through PayPal’s platform.
PayPal’s partnership with Visa Direct last year allowed US users to send money directly to debit card holders through the Xoom service. Cryptocurrency transactions are typically more cost-effective compared to traditional international remittances, as there are no middlemen or related fees involved. Cryptocurrencies like Bitcoin and Ripple have emerged as disruptive forces in the payment industry, offering advantages over conventional methods and paving the way for more efficient and affordable cross-border transactions.
The Bank of International Settlements’s report on stablecoins in cross-border payments highlights the potential of stablecoins, which are pegged to stable assets, as a promising solution to the challenges faced by traditional payment methods. Unlike volatile cryptocurrencies like Bitcoin, stablecoins offer a reliable means of exchange with relatively steady value, making them ideal for cross-border transactions. As the use of stablecoins in payments continues to grow, they are expected to play a significant role in transforming the global remittance market and increasing financial inclusion for users worldwide.
Overall, PayPal’s introduction of PYUSD for cross-border money transfers reflects the company’s commitment to driving innovation in the financial services industry and increasing the accessibility of cryptocurrencies for a broader audience. By leveraging stablecoins and blockchain technology, PayPal aims to provide users with a secure, cost-effective, and efficient way to send money internationally, further advancing the adoption of digital assets in everyday transactions.
