PayPal, a massive payments company, is introducing PYUSD, a native stablecoin, to facilitate free cross-border money transfers.

The new function, which is enabled by its money transfer platform Xoom, was introduced by the Silicon Valley-based startup on Thursday. The service will be accessible to US consumers as of April 4th, according to the statement.

With the help of this service, users can send money to recipients in 160 countries around the world by converting PYUSD stablecoin to USD in their connected PayPal account. It also stated that there will be no Xoom transaction fees for transactions funded by the stablecoin.

Senior vice president of PayPal's crypto division Jose Fernandez da Ponte stressed the need to have a consistent value to boost customer confidence. He also mentioned how crucial it is for payments and commerce.

How It Operates
When a US user chooses the stablecoin, Xoom will convert PYUSD to USD without collecting a cryptocurrency sale charge of its own. To guarantee a seamless transaction on both ends, the recipient will thereafter receive funds in the fiat currency that the sender has selected.

The notice also stated that transactions that aren't finished in USD are subject to a transaction exchange rate.

Last year, PayPal's Xoom service and Visa Direct teamed to enable US users to send money straight to debit card holders.

Because there are no middlemen or associated costs involved, cryptocurrency transactions are far less expensive than regular international transfers. Nevertheless, cryptocurrencies like Bitcoin and Ripple have become powerful disruptive forces with many advantages over traditional approaches.

The Bank of International Settlements (BIS) report on stablecoins in cross-border payments states that these asset classes have become a viable way to address the problems with conventional payment methods.

Stablecoins guarantee a reasonably constant value because, in contrast to Bitcoin, they are linked to a stable asset.