PayPal USD Now Integrated with Universal Digital Payments Network
By: Asia Business Outlook Team | Wednesday, 31 January 2024
Universal Digital Payments Network (UDPN) is excited to announce the integration of the U.S. dollar-denominated stablecoin PayPal USD (PYUSD) onto the UDPN. The UDPN is a Distributed Ledger Technology (DLT)-underpinned global messaging network designed to bridge the gap between legacy payment infrastructures and modern digital currencies, including regulated stablecoins and central bank digital currencies (CBDCs). PayPal’s stablecoin, issued by Paxos Trust Company, reflects a growing preference for regulated financial innovations, particularly with Paxos' regulated status under the New York Department of Financial Services (NYDFS). This shift is underscored by the onboarding of PYUSD to the UDPN’s regulatory-compliant environment.
"Regulated stablecoins like PayPal USD are going to be important for the future of money movement, including payments. UDPN's interoperable payment infrastructure enables PayPal USD to function across different platforms and geographical areas, tackling the challenges of high costs, complex processes, and slow settlements often associated with traditional payment mechanisms, especially for cross-border transactions." – Nick Robnett, Senior Director of Stablecoin Partnerships, Paxos
One of the critical aspects of this integration is PYUSD's anticipated role in UDPN's 12 proof-of-concept (PoC) use cases. These include Facilitating Foreign Exchange on Digital Currencies, Digital Currency Transfer and Swap, and Digital Currency Payment Gateway for E-Commerce. These PoCs, being tested by various banks and technology companies, are at the heart of UDPN's strategy to demonstrate the practicality and potential of e-money in regulated environments. The use of PYUSD as a transaction medium will enable leading global financial institutions to learn more about the potential of stablecoins and demonstrate how UDPN enables interoperability between PYUSD and other digital currencies on the UDPN. UDPN’s enterprise customers will also be able to use PYUSD as one of their supported digital payment currencies. This news follows on the heels of the completion of UDPN's first PoC, which featured UDPN’s collaboration with banking giants Standard Chartered’s SC Ventures and Deutsche Bank on Digital Currency Transfers and Swaps, and PoC#10 with SC Ventures and Giesecke+Devrient on Central Bank Digital Currency (CBDC) Cross-Border Payments, highlighting a growing synergy between traditional and digital financial sectors.
"Integrating PayPal USD underlines UDPN’s ambition to become the leading payment infrastructure for digital currencies. With Paxos‘ wealth of experience in managing stablecoin reserves and digital currency payments, PayPal is positioned to become a leading stablecoin provider. UDPN provides a robust framework for the seamless utilization of PYUSD in diverse payment applications and enhances interoperability and programmability." – Dr Florian Becker, Managing Director Hong Kong & Singapore, GFT
As more and more industry leaders across various sectors introduce their own stablecoins, new use cases and interoperability become increasingly important. This initiative brings together PYUSD's extensive merchant network and expertise in scalable payments with UDPN's innovative Distributed Ledger Technology (DLT)-based infrastructure. With this integration into the UDPN, PYUSD is set to extend its utility beyond current financial paradigms, delivering payment solutions that are more inclusive, efficient, and forward-looking. The support of PYUSD within UDPN not only elevates its global presence but also facilitates broader network adoption.