PayPal Integrates PYUSD for International Transfers via Xoom

Online payment giant PayPal now allows American customers to fund international transfers using its stablecoin PYUSD via Xoom, PayPal’s money transfer service. The integration lets US customers use stablecoin for sending money abroad.

According to PayPal’s announcement on Thursday, this move will bring several benefits, such as reduced costs and enhanced convenience for cross-border payments.

To use this offering, users can choose PYUSD in their PayPal Cryptocurrency Hub and convert it to USD. PayPal notes that they can send the desired funds to recipients across 160 nations without being charged. The firm expects this cost-effective offering will give it an edge in cross-border payment, given the global average fee of over 6% for sending $200.

“Xoom’s new option comes at a time when consumers are seeking cost-effective options for cross-border payments. According to the World Bank’s Q3 2023 report, the global average cost of sending $200 is just over 6%. With no Xoom transaction fees, cross-border money transfers funded using USD converted from PYUSD provides a lower cost option on Xoom,” wrote PayPal.

More Ways To Send Money All The Time

The latest development could be considered PayPal’s effort to enhance PYUSD’s visibility in the stablecoin market and thus boost its adoption. Another strategy that Paxos, the issuer of PYUSD, has adopted is to target DeFi.

In January, Aave, a leading Ethereum lending protocol, sought community approval to support PYUSD. A vote eniding on January 11t with a near-unanimous 99% majority passed the proposal. This means PYUSD will undergo an official review process before official integration with Aave.

Launched last August, PayPal USD (PYUSD) is an ERC-20 stablecoin on the Ethereum blockchain platform and was issued through a partnership between PayPal and Paxos – the stablecoin company behind Binance USD (BUSD) of the Binance exchange.

PayPal’s stablecoin is used for online purchases, bill payments, online services, and sending and receiving money. PayPal claims that it allows the company to offer new services and improve its existing ones.

The stablecoin also helps PayPal expand into new markets such as the cryptocurrency market, allowing investors to use PayPal USD to trade cryptocurrencies more safely and easily.

However, despite huge expectations, the dollar-backed stablecoin has struggled to challenge established players like Tether’s USDT or Circle’s USDC. According to data from CoinMarkeCap, PYUSD’s market cap is currently around $190 million, 30% lower than its peak of around $273 million in January.

Its humble trading volume has fallen short of expectations. Meanwhile, USDT already has surpassed $100 billion in market cap. Even compared to USDC or DAI, PYUSD still lags in terms of market cap.

Stablecoins Hitting The Wires

PayPal’s announcement comes as the stablecoin market heats up with a major player entering the scene. On the same day, Ripple unveiled plans to launch a stablecoin on the Ethereum network and XRPLedger.

Scheduled for release by year-end, Ripple’s stablecoin will be backed by a mix of US dollars, short-term US Treasuries, and other cash equivalents.

Ripple said that its stablecoin will be subject to monthly asset audits by a third party. The name of the auditing firm is undisclosed.

Ripple CTO David Schwartz also stated that the stablecoin will have a legal relationship with US institutions and will be easier than the approach currently being used by Tether. He predicts that the stablecoin market, which is currently worth over $150 billion, could soar to $2.8 trillion by 2028.

Ripple envisions a future where US users can seamlessly deposit stablecoins at banks and integrate them across business segments for everyday applications within the traditional financial market. With this initiative, the firm aims to bridge the gap between the digital asset space and the established financial system.

This step is said to expand stablecoin options on the XRP Ledger network. In addition, typical product segments in DeFi, such as AMM exchanges, will also be supported after the addition of a new asset solution, stablecoin.

Besides Ethereum and XRP Ledger, the company plans to bring it stablecoin to other blockchain networks post-launch.

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