PayPal USD (PYUSD)

Payments

PayPal USD is a stablecoin pegged 1:1 to the U.S. dollar, designed to simplify digital payments. Users can send PayPal USD to friends and family within the U.S. on PayPal without fees. It can also be used to pay for purchases through PayPal and Venmo.

Transfers

It enables fast, fee-free peer-to-peer transfers between PayPal accounts and can be sent to external Ethereum and Solana wallets that support PayPal USD, making it easy to move money across platforms.

Crypto Ecosystem Integration

PayPal USD works within the blockchain ecosystem as an ERC-20 token on Ethereum and Solana, allowing developers to build new services and products using it as a programmable payments layer. It supports seamless conversion between PayPal USD and other cryptocurrencies on PayPal.

Financial Use

Users can hold PayPal USD as a stable digital asset backed by U.S. dollar deposits and short-term U.S. Treasuries. It offers a stable value for those seeking to reduce volatility in their crypto holdings.

Developer and Merchant Use

Merchants and developers can accept PayPal USD for payments, and it supports integration into web3 applications, expanding digital asset use in commerce and decentralized finance.

Rewards

PayPal offers rewards for holding PayPal USD in PayPal or Venmo wallets, providing an incentive to keep the stablecoin within their ecosystem.

Pros of PayPal USD

• Stable Value: PayPal USD is a stablecoin fully backed 1:1 by U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents, which helps keep its value steady.
• No Fees for Basic Transactions: There are no fees to buy, sell, hold, or send PayPal USD within eligible U.S. PayPal accounts.
• Easy to Use: You can buy, sell, hold, send, and use PayPal USD directly within the PayPal app or website, making it convenient for users already familiar with PayPal.
• Transfer Options: PayPal USD can be sent to friends and family within PayPal without fees and can also be sent to external Ethereum and Solana wallets (network fees may apply).
• Integration with Payments: You can use PayPal USD to pay for purchases, with automatic conversion to fiat currency at checkout.
• Transparency: Monthly reserve attestations are published by an independent third party to show backing of the stablecoin.

Cons of PayPal USD

• Limited Ecosystem: PayPal USD is mainly designed for use within the PayPal ecosystem, which may limit its use compared to other stablecoins that work broadly across many wallets, exchanges, and DeFi platforms.
• Conversion Fees: While buying and selling PayPal USD is free, converting between PayPal USD and other cryptocurrencies incurs fees.
• Custodial Control: PayPal holds the private keys, so users do not have full control over their PayPal USD like with non-custodial wallets.
• Competition: Faces strong competition from established stablecoins like USDT and USDC, which have larger market caps and wider acceptance.
• Regulatory Uncertainty: As a newer stablecoin, future regulations could impact its use and growth.

These points summarize the main advantages and disadvantages of using PayPal USD as a crypto token.

Founders of PayPal USD

PayPal USD is a stablecoin launched by PayPal, a company originally founded by the team behind PayPal. The key founders of the original PayPal company include:

• Max Levchin: Co-founder and early technologist focused on security software.
• Peter Thiel: Co-founder and first CEO, known for leadership and vision.
• Luke Nosek: Co-founder involved in early development and strategy.
• Elon Musk: Founder of X.com, which merged with Confinity (PayPal's original name) to form PayPal.

These founders created the foundation for PayPal, which later introduced PayPal USD as part of its crypto and digital payments expansion.

Investors in PayPal USD

• PayPal Holdings, Inc.: The main investor and issuer of PayPal USD is PayPal itself, a major global digital payments company.
• Paxos Trust Company: A regulated fintech partner that issues and manages PayPal USD on behalf of PayPal.
• Public Investors: Since PayPal is a publicly traded company (NASDAQ: PYPL), its shareholders indirectly support PayPal USD through their investment in PayPal.
• Institutional and Retail Investors: Those who buy PayPal USD or PayPal stock contribute to its market presence and liquidity.

PayPal USD is fully backed by U.S. dollar deposits, U.S. Treasuries, and cash equivalents, ensuring stability and trust from investors.

Halal Status of PayPal USD

• Yes, PayPal USD is generally considered halal because it is a stablecoin backed by US dollars and cash equivalents, designed to maintain a stable value without involving interest (riba) or gambling (maisir).
• The permissibility depends on the nature of the transaction using PayPal USD; if the transaction itself is halal, then using PayPal USD is also halal.
• PayPal as a payment platform is viewed as a service provider charging fees for its services, which is permissible.
• However, PayPal Holdings Inc (the company) is sometimes considered non-Shariah compliant due to some revenue from interest-based activities, but this does not directly affect the halal status of using PayPal USD for transactions.

In summary, using PayPal USD for halal transactions is halal.