In an effort to increase the use of digital currencies for payments and transfers, payments company PayPal introduced a U.S. dollar stablecoin on Monday.
According to the corporation, Paxos Trust Co. will produce the stablecoin known as PayPal USD, which is backed by short-term U.S. Treasury bonds and dollar deposits.
PayPal shares rose by 1.4% to $63.66.
Stablecoins are digital currencies created to be shielded from the extreme volatility that makes it challenging to use digital assets as a store of value or for making payments.
The digital payments business announced that PayPal USD, which is pegged to the dollar, will gradually become available to its users in the US.
A U.S. legislative committee attempted to pass legislation last month to create a national regulatory framework for stablecoins, but they were unable to reach an agreement.
In 2021, Visa announced that it will permit the use of the cryptocurrency USD Coin for transaction settlement on its payment network.
