PayPal's on-chain, licensed stablecoin, PayPal USD (PYUSD), is now accessible on Venmo, backed by U.S. dollar deposits and shorter-term U.S. Treasury bonds and cash. The initial aim of introducing PYUSD was to bridge fiat dollars with the Web3 ecosystem, promising faster and more cost-effective daily payments.

With a focus on this goal, PayPal has begun rolling out PYUSD on Venmo, initially to select users with plans for broader availability soon. Venmo users can now purchase PYUSD and transfer it to PayPal, Venmo, or compatible external wallets, facilitating seamless wallet interoperability without additional fees for PayPal and Venmo users. However, transactions involving adaptable external wallets and businesses accepting PYUSD payments may incur blockchain network fees.

PYUSD has already made its mark in the traditional crypto space and is expanding its accessibility through various exchanges, institutional service providers, and primary wallets. Additionally, it has received approval from the New York State Department of Financial Services, enhancing its credibility and regulatory compliance.

Venmo, a PayPal affiliate, collaborated with Paxos to introduce PYUSD, following PayPal's earlier launch of a crypto-to-USD conversion service, allowing customers to convert digital currency into U.S. dollars.