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PayPal is entering the crypto-asset market with its own "PayPal USD" (PYUSD) U.S. dollar-pegged stablecoin. The Ethereum-based token will be available to PayPal users in the U.S., who will be able to transfer PYUSD between PayPal and supported external wallets, fund goods and services purchases, or convert any of PayPal's supported crypto-assets to and from PYUSD. PYUSD is issued by New York-based Paxos Trust and fully backed by US dollar deposits, short-term Treasuries and similar cash equivalents, and will be redeemable on demand for dollars. https://newsroom.paypal-corp.com/2023-08-07-PayPal-Launches-U-S-Dollar-Stablecoin

Coinbase's U.S. customers can now buy crypto on the exchange via debit cards and bank accounts linked to PayPal. Customers will have to click on "add a payment method" and select PayPal, which whisks them off to a PayPal login screen, after which a debit card or bank account linked to the customer's PayPal account is selected. It seems that the last steps are to block customers from funding crypto purchases with PayPal-linked credit cards.

PayPal launched Checkout with Crypto that US PayPal customers with certain crypto-assets (Bitcoin, Litecoin, Ethereum or Bitcoin Cash) will be able to choose to check out with crypto seamlessly within PayPal at millions of global online businesses. Customers pay no transaction fees but a spread will be built into the conversion from crypto to USD. There are no additional integrations or fees required by the business. All transactions are settled in USD and converted to the applicable currency for the business at the standard PayPal conversion rates.

PayPal announced the new PayPal app, an all-in-one, personalized app that offers customers new features including PayPal Savings, a new high yield savings account provided by Synchrony Bank, alongside new in-app shopping tools that will enable customers to earn rewards redeemable for cash back or PayPal shopping credit and uncover deals with hundreds of merchants. It will now also include support for paycheck Direct Deposits through PayPal's bank partners with two-day early access.

PayPal is exploring the launch of its own stablecoin as part of its cryptocurrency push. Evidence of the company's exploration into building a stablecoin was first discovered in PayPal's app by developer Steve Moser. Hidden code and images show work on what is dubbed a "PayPal Coin." The code indicates such a coin would be backed by the U.S. dollar. A PayPal spokeswoman said that the images and code inside of the PayPal app stemmed from a recent internal hackathon.

PayPal's PYUSD stablecoin, which previously had only been available on Ethereum, has been deployed on Solana which offers "confidential transfers" as an optional feature. When enabled, it would allow merchants to provide confidentiality for transaction amounts to their consumers while maintaining visibility for regulatory purposes. According to PayPal, it chose the Solana blockchain for its high speeds with extremely low costs. https://solana.com/news/pyusd-paypal-solana-developer https://newsroom.paypal-corp.com/2024-05-29-PayPal-USD-Stablecoin-Now-Available-on-Solana-Blockchain,-Providing-Faster,-Cheaper-Transactions-for-Consumers

PayPal supporting major crypto-assets undoubtedly buoy the image of the sector and the asset class. It further strengthens the perception of Bitcoin as an established store of value and crypto-assets as recognized assets. But this comes with a catch. At least in the near term, it would not allow users that buy crypto on PayPal to transfer outside of their accounts. In the words of Ripple CEO Brad Garlinghouse, "2 steps forward, 1 step back… Great to see a payment pioneer leaning in, BUT disappointing some fundamental tenets / benefits of crypto are spurned. I suspect PayPal is concerned about the regulatory uncertainty, impacting its roll-out on a number of levels".

After claiming it was a mistake, PayPal has reinstated its $2500 penalty for each violation of its Acceptable Use Policy. Earlier in October 2022, PayPal was lambasted for its authoritarian move and intolerance of free speech. While the wording of the policy has changed, it still gives PayPal the right to penalize users that violate the terms by "the promotion of hate, violence, racial or other forms of intolerance that is discriminatory." While certain aspects can be easily defined, others - such as intolerance - can be subjective depending upon individual beliefs.

Paypal launched Pay in 4, an interest-free short-term "buy now, pay later" installment payment service for its customers in the United States. Merchants get paid upfront while customers pay for purchases between $30 and $600 in four instalments over a six-week period. Pay in 4 is included in the merchant's existing PayPal pricing, so merchants don't pay any additional fees to enable it for their customers. Pay in 4 will be available to consumers on qualifying purchases in early Q4 2020, but merchant sign-up is now in progress.

According to U.S.-based Reddit user u/TheCoolDoc, PayPal sent them a message stating it had permanently limited their account "due to potential risk." The user said they had made at least 10 crypto transactions within a week, purchasing during dips and selling when the price was high, and PayPal had asked for an explanation for each transaction. The maximum dollar amount for weekly crypto purchases is $20,000, but there doesn't appear to be any limit on numbers of trades per week.

PayPal plans to let users withdraw crypto-assets to third-party wallets. At present, PayPal does not let users move crypto-asset holdings off-platform, though it has let customers buy bitcoin and other crypto-assets since October 2020.

PayPal reportedly plans to roll out direct sales of crypto-assets to its 325 million users. Currently, PayPal can be used as an alternative means for withdrawing funds from exchanges such as Coinbase, but this would be a first in terms of offering direct sales of crypto. They are apparently going to have some sort of a built-in crypto-asset wallet functionality.

PayPal announced plans to enable British customers buy, hold, and sell Bitcoin, Ethereum, Litecoin and Bitcoin Cash, starting this week. By accessing their PayPal account via the website or the mobile app, they can view real-time crypto prices, access educational content to help answer commonly asked questions, and learn more about cryptocurrencies, including the opportunities and risks.

PayPal is reportedly pausing work on its stablecoin as regulators increase scrutiny of cryptocurrencies and Paxos,  a key partner in the project, faces a probe by the New York State Department of Financial Services. A PayPal official confirmed that the firm is exploring a US dollar backed stablecoin, adding that "if and when we seek to move forward, we will, of course, work closely with relevant regulators."

PayPal announced that it has agreed to acquire Curv to accelerate and expand its initiatives to support cryptocurrencies and digital assets. Curv is a leading provider of cloud-based infrastructure for digital asset security based in Tel Aviv, Israel.

The New York State Department of Financial Services (NYDFS) has granted the first "conditional BitLicense" to PayPal for a partnership with Paxos Trust Company enabling customers to buy and sell crypto-assets. Now New York State-chartered Paxos will be able to provide trading and custodial services to PayPal to allow the latter's 325-plus million customers to buy, sell, and hold crypto-assets. Four NYDFS-approved digital assets will be initially available: bitcoin, bitcoin cash, ether and litecoin. https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202010211

PayPal's PYUSD stablecoin, announced on August 7, 2023,  is fully backed by U.S. dollar deposits, short-term U.S. treasuries and similar cash equivalents, and can be redeemed 1:1 for U.S. dollars, which all sounds good. However, according to Sasha Hodder, the PTUSD terms of service there will be full know-your-customer (KYC) intrusion, and PayPal can reverse any transaction, so it would have all of the *potential* censorship capabilities of a CBDC. And according to Jamiel Sheikh's analysis of the underlying code, PayPal can freeze and unfreeze accounts, and wipe a frozen account and burn its tokens. https://www.linkedin.com/posts/jamiel_pyusd-activity-7094414458965356544-XSwc/

PayPal's PYUSD on-chain dollar-denominated stablecoin 100% backed by U.S. dollar deposits, short-term U.S Treasuries, and similar cash equivalents, is available on Venmo to select users and will be rolling out fully in the coming weeks. Transfers between PayPal and Venmo users are fast and free, connecting two wallets with millions of users each. Individuals using compatible external wallets, and merchants accepting payments in PYUSD, will also be able to receive transfers from Venmo users. Blockchain network fees apply. Also, PYUSD has been greenlisted by the New York State Department of Financial Services, making it easier for virtual currency entities licensed in New York to support PYUSD.

"Recently, there have been some questions regarding changes to upcoming U.S. tax reporting requirements that could impact the information PayPal shares with the Internal Revenue Service (IRS) about transactions made using PayPal and Venmo for the sale of goods and services. While a lot of questions still need to be answered, and in some instances, legislation finalized and signed into law, we've answered some of the most pressing questions below - and we'll be sure to keep this list updated as more details are finalized."

So how are stablecoins being regulated in the U.S? One of the many frameworks that has been adopted is existing state-based money transmitter law. The biggest stablecoin - USD Coin - is issued by Circle Internet, a company that is licensed by around 40 different states to transmit money. Oddly, this is the same regulatory framework that applies to old school remittance companies like Western Union. If you've never made a remittance before, here's how it works. A retail customers temporarily hand over a small amount of money, say $200, to a Western Union agent. The agent contacts a foreign Western Union office and tells them to provide cash to the customer's friend or relative. In the early 2000s this money transmitter framework was expanded to cover the likes of PayPal. Whereas Western Union keep customer funds for an hour or two, tops overnight, customers of PayPal keep balances in their wallet for months, even years. This storage function means that PayPal is doing something quite different than Western Union.