On September 23, PayPal achieved a significant milestone by executing its inaugural business transaction utilizing its stablecoin PYUSD, settling an invoice with Ernst & Young LLP. This news was reported by Bloomberg on October 3.
The payment was made through SAP’s digital currency hub, a sophisticated platform that enables businesses to conduct digital transactions in real-time. However, the specific transaction amount was not disclosed.
Advantages of Stablecoin Payments for Businesses
Stablecoins are typically associated with retail consumers, particularly in countries that experience currency fluctuations.
According to the “2023 Geography of Cryptocurrency Report” from Chainalysis, regions like Argentina, Venezuela, and Mexico demonstrate a high reliance on stablecoins as a hedge against inflation and a cost-effective method for cross-border transactions.
Insights from PayPal’s Executives
Jose Fernandez da Ponte, PayPal’s Senior Vice President of blockchain and cryptocurrency, emphasized that the business landscape is increasingly conducive to the adoption of stablecoins.
He noted that cross-border business payments are often slow and expensive due to the involvement of third-party intermediaries. Consequently, using stablecoins can expedite settlements and is gaining traction among businesses.
Recent Developments in Crypto Transactions
On September 25, PayPal unveiled new functionalities permitting US merchants to buy, hold, and sell cryptocurrencies directly through their business accounts.
A survey conducted by Ernst & Young in July revealed that PYUSD has emerged as the preferred stablecoin for transactions, with 47% of respondents reporting its use for payments. This survey included both accredited and non-accredited investors.
In addition, the payment service BVNK has begun exchanging US dollars sent through its Swift platform for stablecoins like PYUSD, which are then forwarded to clients globally.
Addressing Industry Concerns
In light of recent industry challenges following the collapse of FTX, the Vice President of PayPal’s crypto division reassured stakeholders of the reliability and utility of PYUSD for business-related transactions, citing partnerships with traditional financial giants as a testament to its credibility.