PayPal recently made headlines by completing its first business payment using its stablecoin PYUSD to settle an invoice with Ernst & Young LLP. This transaction, which took place on September 23, was facilitated through software company SAP’s digital currency hub, allowing for instant digital payments between businesses.
Stablecoins, which are typically associated with retail users in regions with volatile fiat currencies, are becoming increasingly popular in the business world. According to a report by Chainalysis, countries like Argentina, Venezuela, and Mexico are embracing stablecoins as a means of protecting against inflation and reducing the costs associated with cross-border transactions.
Jose Fernandez da Ponte, PayPal’s senior vice president for blockchain, cryptocurrency, and digital currency, emphasized that stablecoins are well-suited for business-to-business payments, especially those involving cross-border transactions. By eliminating third-party intermediaries, stablecoins offer faster settlement times and lower transaction costs, making them an attractive option for businesses looking to streamline their payment processes.
In addition to enabling business payments with stablecoins, PayPal also introduced services in September that allow US merchants to buy, hold, and sell cryptocurrencies through their business accounts. A survey conducted by Ernst & Young revealed that PYUSD is the most widely used stablecoin for payments, with 47% of respondents using the PayPal dollar-pegged token for their transactions.
BVNK, a payments infrastructure provider, has also started swapping US dollars for stablecoins like PYUSD and facilitating global transfers for its clients. This move towards adopting stablecoins for business transactions comes in the wake of concerns within the industry following the collapse of FTX. By partnering with traditional giants like Ernst & Young, PayPal aims to demonstrate the stability and utility of PYUSD as a reliable payment option for businesses.
Overall, PayPal’s foray into business payments with stablecoins marks a significant step towards mainstream adoption of digital currencies in the corporate world. As more businesses embrace the efficiency and cost-effectiveness of stablecoin payments, we can expect to see further innovation and growth in the cryptocurrency space.