Introduction

Financial transactions firm PayPal launched a dollar-denominated stablecoin on Monday to increase reliance on digital currencies for payments and transfers.

The firm said the stablecoin is backed by dollar deposits and short-term US Treasury bonds and will be issued by Paxos Trust.

Shares of PayPal rose 1.4% to $63.66, according to Reuters.

Stablecoins for Stability

Stablecoins are cryptocurrencies designed to protect against extreme volatility that makes it difficult to use digital assets for payments or as a store of value.

PayPal has said that the stablecoin will be gradually made available to the company’s US customers.