- PayPal Crypto allows US merchants to use stablecoins for faster, cheaper payments.
- Businesses demand stablecoins for instant, low-cost payments, especially in cross-border transactions.
- Customers in Asia and Latin America use PayPal Crypto due to limited traditional payment options.
- PYUSD’s market cap fluctuates, but PayPal sees growing stablecoin usage in monthly transfers
PayPal has made a step towards enabling merchants in the US to use stablecoins for transactions. In a recent interview with CNBC, Jose Fernandez da Ponte, who leads the PayPal crypto team, shared details about this significant move and its impact on businesses and customers.
We will be breaking down everything you need to know about this program, its adoption, and its impact.
PayPal Crypto Expands to Merchants
For the first time, PayPal has extended the ability to buy, hold, and sell cryptocurrency to business accounts. According to Jose Fernandez da Ponte, “We have been active on stablecoins for about a year, but until now, only our consumer accounts were able to interact with our stablecoin.” Merchants have long requested this feature, and now, it’s here. Fernandez da Ponte views this as “a very good sign” that businesses are ready to embrace this technology.
So, this launch addresses one of the most common requests from merchants—access to cheaper and faster payments. “We do hear demand on the merchant side for cheaper and faster, and instant settlement of payments,” he said, explaining why PayPal Crypto could be transformative for businesses.
PayPal Crypto: Demand from Businesses and Customers
Although merchants see the immediate benefit of faster, cheaper payments, it’s not yet clear how customers will respond. Fernandez da Ponte explained that while there is interest from businesses, “I don’t think… consumers in most of the western markets and the US in Europe will be doing mainstream e-commerce funded by stablecoins right away.” Instead, most of the current demand for stablecoins comes from cross-border payments and crypto trading.
He noted that stablecoins will likely be more popular in business-to-business (B2B) transactions, especially for companies dealing with international suppliers. “A lot of the demand that we see from merchants are companies who want to pay their suppliers in something that settles consistently and is low cost,” he said. These businesses, especially Chief Financial Officers managing global treasury operations, are drawn to stablecoins for their speed and low fees.
For now, PayPal Crypto is only available to US merchants, but the potential for expansion is huge. PayPal sees opportunities in regions with a stronger crypto presence, particularly in Asia and Latin America. So, Fernandez da Ponte noted that people in these regions often lack access to traditional payment methods like international credit cards. “We see people in Asian markets and Latin American markets who want to buy from US merchants but lack the traditional payment methods to do that,” he explained.
PYUSD’s First Year: Steady Progress
PayPal’s stablecoin, PYUSD, has been live for over a year now. When asked about its adoption, Fernandez da Ponte said, “It has been going well.” Unlike most stablecoins that are used primarily for trading, PayPal designed PYUSD for commerce and payments. “We are less interested in [crypto trading]… we want our stablecoin to be useful for what we call value in motion,” he clarified.
PYUSD is integrated within PayPal’s ecosystem, making it the only stablecoin supported inside the platform. With more than 400 million consumers and 35 million merchants, PayPal has a vast network to deploy its stablecoin. Customers can already use PYUSD to checkout with millions of merchants, and it’s also used in PayPal’s remittance business, Zoom.
Although PYUSD hit a $1 billion market cap in August, it has since dropped to around $724 million. However, Fernandez da Ponte isn’t concerned, pointing out that fluctuations in market cap are normal, especially with smaller stablecoins. “When we look at the chain transfer volume… the amount of stablecoin changing hands every month, we see that going steadily up.”
The Future of PayPal Crypto
PayPal has bigger plans for its stablecoin. Fernandez da Ponte noted that while PYUSD is currently only available to US merchants, merchants outside the US can interact with it because PYUSD is already supported on more than 20 exchanges worldwide. “Merchants outside the US will be able to interact with the stablecoin because it’s already available in more than 20 exchanges and wallets all over the world,” he stated.
PayPal is also focusing on making stablecoins more useful for cross-border payments. “Interoperability of wallets is something where we see a ton of promise,” he said. Thus, this kind of flexibility could solve payment problems for both businesses and consumers.
In the long run, PayPal’s goal is to revolutionize commerce, “We don’t have an ideology on blockchains… we are seeing a technology that allows people to move money around… at a cost that is between 10 and 20 times cheaper than a bank-funded transaction,” he said. So, with the backing of new CEO Alex Chriss, the company is focused on integrating these new payment rails into its global ecosystem.
Conclusion
PayPal’s move to enable stablecoins for merchants is a shift in how businesses might handle payments in the future. By offering faster, cheaper transactions, PayPal Crypto could become a game-changer, especially in cross-border B2B transactions.
Although consumer adoption of stablecoins may take time, the demand from businesses is already clear. So, as Jose Fernandez da Ponte said, “We are very satisfied with the progress,” but there’s still much more to come.
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is the opinion of the author and does not reflect any view or suggestion or any kind of advice from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from the company.
