PayPal recently completed its first business payment using its proprietary stablecoin, PYUSD, marking a significant step in demonstrating how digital currencies can streamline commercial transactions, according to a report by Paige Smith for Bloomberg News.
The payment, made on 23 September 2024, was for an invoice sent to Ernst & Young LLP and was facilitated by SAP SE’s digital currency hub, a platform enabling instant, 24/7 digital payments. The amount of the transaction was not disclosed.
PYUSD, launched in 2023, is a stablecoin tied to the US dollar with a market capitalization of nearly $700 million. While stablecoins are often discussed in the context of consumer benefits, this payment illustrates their potential use in business-to-business (B2B) transactions, according to Jose Fernandez da Ponte, PayPal’s senior vice president of blockchain, cryptocurrency, and digital currency. He emphasized that stablecoins can significantly improve the efficiency of B2B payments, particularly for cross-border transactions, which are traditionally slow, expensive, and dependent on third-party intermediaries.
In recent years, businesses, especially in countries with volatile currencies, have increasingly turned to stablecoins like Tether for cross-border payments. Stablecoins offer faster settlement times and allow companies to bypass the challenges of traditional financial systems. PayPal’s stablecoin-enabled payments aim to provide similar advantages by reducing transaction costs and improving settlement speed, making the process more attractive to enterprises.
In August 2024, PayPal expanded its crypto services by allowing merchants to buy, hold, and sell cryptocurrency from their business accounts. By collaborating with trusted partners, PayPal aims to showcase the practicality of using stablecoins for business payments, especially as digital currencies continue to face scrutiny in the wake of the FTX scandal and other crypto-related controversies.
