PayPal has been at the forefront of commerce innovation for more than 25 years. Recently, the payments behemoth has been expanding the reach of its stablecoin, PayPal USD (PYUSD), including its integration with Arbitrum, currently the largest Layer 2 or scaling solution that sits atop Ethereum. This development is another step to increase the efficiency and accessibility of PYUSD. It gives developers a new platform for building on top of, facilitating wider adoption.
PayPal helps democratize financial services for consumers and merchants around the world, giving them the tools and confidence to thrive in the global economy. By creating streamlined, personalized, and secure experiences for moving money, selling, and shopping, PayPal has become a cornerstone of modern digital finance. The release of PYUSD was a big bet for the company’s move into the digital currency space. Ultimately, it provides users with the easiest, most predictable means of doing business on-chain.
PYUSD sets itself apart with a clear dedication to stability and security. The reserves backing PYUSD are completely collateralized by U.S. dollar deposits, U.S. Treasuries, and other cash equivalents. Each PYUSD token can be purchased or transferred through PayPal and Venmo. This ensures that the rate is always predictable at $1.00. Individuals and entities with direct redemption access via PayPal, Paxos, or authorized partners have the guarantee to convert PYUSD 1:1 for U.S. dollars, reinforcing trust and reliability in the stablecoin. Paxos, the issuer of PYUSD, is licensed by the New York State Department of Financial Services to engage in Virtual Currency Business Activity. This new licensing brings with it another valuable layer of regulatory oversight and protects consumers from bad actors.
Supporting Arbitrum One and Arbitrum Nova improves PYUSD for users and developers in many important ways. Through the Arbitrum network which supports PYUSD, transactions cost less than a cent and settle within seconds, a vast improvement over the 10-minute average on Bitcoin’s chain. As of mid-August, transaction fees for PYUSD on Arbitrum typically don’t exceed $0.01. This low cost makes it ideal for microtransactions and other use cases where minimizing costs is key. This creates new opportunities for content micropayments, usage-based billing, instant rewards distribution, and more.
Arbitrum's technology, which employs optimistic rollups, allows for faster and cheaper transactions by processing them off-chain while still benefiting from Ethereum's security. Arbitrum is an extremely transparent, on-chain governed network that guarantees the decentralization and community nature of the chain, just like Ethereum itself. Arbitrum improves scalability and data availability by taking advantage of Ethereum’s security model. This provides a safe and stable climate for PYUSD transactions. Since then, the network has already secured more than $2.5 billion in global value. This remarkable number further indicates its increasing popularity and adoption across the decentralized finance (DeFi) landscape.
"A key to any cryptocurrency’s success is a robust developer ecosystem, but to encourage developers into the community, we must give them the tools they need to build and deploy wherever they wish," - May Zabaneh, Vice President of Product, PayPal.
This deployment is the first Layer 2 option for developers wanting to bring PYUSD into their applications. By offering a more scalable and cost-effective environment, PayPal hopes to drive more adoption and innovation inside its ecosystem. This is why PayPal is working with Arbitrum to embrace these new technologies. This acquisition strengthens its core services while extending its geographic reach.
