PayPal completed its first business payment on September 23, using his stablecoin PYUSD to settle an invoice with Ernst & Young LLP, Bloomberg News reported on October 3.
The transaction was made possible using software company SAP’s digital currency hub, a platform that allows companies to instantly send and receive digital payments. The amount was not disclosed.
Stablecoin payments suitable for businesses
Notably, stablecoins tend to be tied to retail users, especially in regions with volatile fiat currencies.
According to Chainalysis’s “2023 Geography of Cryptocurrency Report,” countries such as Argentina, Venezuela and Mexico frequently use stablecoins as protection against inflation and as a cheaper alternative for cross-border transactions.
Jose Fernandez da Ponte, PayPal’s senior vice president for blockchain, cryptocurrency and digital currencies, stated that the business environment is also well suited for the use of stablecoins.
He added that business-to-business payments, especially cross-border, are often slow and expensive due to third-party intermediaries. The adoption of stablecoins in these cases therefore offers faster settlement and is increasingly favored by companies.
PayPal introduced services on September 25 that will allow US traders to buy, hold and sell cryptocurrencies through their business accounts.
An Ernst & Young questionnaire The report published in July highlighted that PYUSD is the most used stablecoin for payments, with 47% of respondents using the PayPal dollar-pegged token in their payments. Accredited and non-accredited investors participated in the study.
In addition, payment infrastructure BVNK began exchanging US dollars sent to its platform via Swift for stablecoins, including PYUSD, and then sending the funds to customers around the world.
The vice president of crypto-related affairs at PayPal also spoke about the industry concerns following the collapse of FTX. He explained that the partnership with such traditional giants is intended to demonstrate the stability and usefulness of PYUSD for business transactions.