PayPal has launched a new service that allows US users to fund international money transfers using its stablecoin, PayPalUSD (PYUSD).
How it Works
Xoom, PayPal’s remittance provider, now allows users to convert PYUSD in their PayPal account to US dollars and use it to send money to over 160 countries. When using this option, Xoom converts the PYUSD to USD without any crypto sale fees. The recipient receives the funds in the fiat currency selected by the sender.
Benefits
PayPal emphasizes that Xoom will not charge transaction fees for stablecoin-funded transfers. However, remittances received in currencies other than the US dollar may incur exchange rate and conversion spread fees.
Why Stablecoins?
PayPal’s move comes amid concerns about the high global cost of remittances, which stands at 6.18% according to a World Bank report. By leveraging stablecoins, PayPal aims to reduce these costs for its US customers.
PayPal’s Perspective
Jose Fernandez da Ponte, senior vice president of PayPal’s Blockchain and Cryptocurrency Group, stated: “This service aligns with our goal of promoting cryptocurrency adoption and providing a secure and cost-effective way to send money internationally.”
