PayPal has launched its own crypto token, a dollar-pegged stablecoin called PayPal USD, becoming the first major US fintech company to do so.

The company is entering a competitive market already dominated by stablecoins like tether and USDC, despite waning cryptocurrency hype and stable prices since 2022.

PayPal’s crypto executive, Jose Fernandez da Ponte, is confident in their timing and asserts that stablecoins are essential for blockchains due to their advantages in cost, programmability, and settlement time. PayPal’s stablecoin launch comes after a drop in crypto liquidity and banking instability, making the company’s regulated infrastructure advantageous.

Despite challenges like scams and regulatory uncertainties, PayPal aims to capitalize on institutional interest in the growing stablecoin space.