PayPal Partners with Xoom for Cross-Border Stablecoin Payments

In a strategic move to expand its stablecoin ecosystem, PayPal has teamed up with Xoom to enable cross-border payments using its dollar-backed stablecoin, PayPal USD (PYUSD). Announced on Nov. 19, the partnership aims to extend PYUSD's accessibility in Asian and African markets while streamlining transactions beyond traditional banking hours.
Revolutionizing Cross-Border Payments with PYUSD
Xoom, a PayPal-owned remittance platform, is collaborating with financial service providers Cebuana Lhuillier and Yellow Card to handle PYUSD disbursements. Chris Maurice, CEO of Yellow Card, emphasized the transformative role of stablecoins in global finance:
“Stablecoins like PYUSD are changing the payments landscape. By integrating our technology, PayPal can move money more effectively through its stablecoin and payments infrastructure.”
What is PYUSD?
Launched in 2023, PYUSD is an Ethereum-compatible ERC-20 token backed 1:1 by U.S. dollars. Issued by Paxos Trust Company, a U.S.-regulated crypto custodian, PYUSD competes with other regulated stablecoins such as Circle’s USD Coin (USDC).
As the only stablecoin supported on PayPal’s payment network, PYUSD is designed for seamless integration with wallets, Web3 applications, and cryptocurrency exchanges, making it a versatile asset in the growing digital payments ecosystem.
Expanding PYUSD's Reach
PayPal has actively worked to increase PYUSD’s adoption through various initiatives:
- Rewards Program: Collaborated with Anchorage Digital to launch a rewards program for clients who custody PYUSD.
- Blockchain Expansion: In May, PYUSD debuted on the Solana blockchain, supported by partnerships with Crypto.com, Phantom, and Paxos.
- Web3 Partnerships: Partnered with MoonPay to enable cryptocurrency purchases using PayPal accounts and extended this integration to platforms like Polymarket.
Competing in the Stablecoin Market
Despite these advancements, PYUSD faces stiff competition from market leaders like Tether’s USDT and Circle’s USDC. As of November 2024, USDT and USDC command market capitalizations of approximately $128 billion and $37 billion, respectively, far surpassing PYUSD.
PayPal’s efforts to integrate PYUSD into Web3 ecosystems and global payment networks could gradually close this gap. However, the competition remains fierce, with players like Coinbase also incentivizing users to hold USDC by offering an annual percentage yield of 5.2%.
The Future of Stablecoins in Payments
PayPal’s partnership with Xoom underscores the growing role of stablecoins in cross-border transactions. By leveraging PYUSD, PayPal aims to provide faster, more efficient payment solutions while expanding its footprint in emerging markets.
Stay tuned for updates as stablecoins continue to reshape global finance, offering innovative solutions for cross-border commerce.
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