Digital lender FV Bank is expanding its stablecoin capabilities via a partnership with PayPal.
The bank announced Thursday (Jan. 9) that it was integrating PayPal’s stablecoin PayPal USD (PYUSD) for direct deposits and outbound payments. This feature, which is now live for account holders, allows for the direct receipt of PYUSD into customers’ USD accounts, with automatic real-time conversion to USD.
USD is the stablecoin from cryptocurrency exchange Circle, which launched a partnership with FV Bank in 2022.
“The integration of PYUSD deposits and payments, along with auto-conversion to and from USD, is another key accomplishment in our commitment to provide the most comprehensive integrated banking service for our global customers,” Miles Paschini, CEO of FV Bank, said in a news release.
“This additional deposit and payment option positions FV Bank as one of the only regulated banking institutions in the USA to offer blockchain-powered payment rails, as well as extensive stablecoin on-ramp and off-ramp services.”
With the integration, the release said, account holders can send outbound payments to beneficiaries in PYUSD without needing to mint the stablecoin themselves or manage an external digital wallet.
The announcement comes a little more than a month after FV revealed it was now supporting direct USDT stablecoin deposits.
As PYMNTS wrote at the time, the news suggests that “cross-border payments optimization could be arriving — for both financial institutions (FIs) and their end-users — faster than anyone could have anticipated.”
Traditional cross-border payments are known for their high fees, slow processing times and opaque intermediaries. Stablecoins present an enticing alternative by allowing near-instantaneous transfers, substantially reducing costs and providing enhanced transparency through blockchain technology.
“However, their utility has been somewhat limited by the difficulty of moving funds between stablecoins and fiat currencies — a gap that on-ramp and off-ramp services aim to fill,” PYMNTS wrote.
“For banks, this functionality highlights the emergence of a potentially stark choice: adapt to a changing payments landscape or risk disintermediation.”
In related news, PYMNTS earlier this week looked at what the coming year could bring for cryptocurrency regulation, noting that stablecoin legislation is likely to come before rules governing crypto markets.
Marta Belcher, president of the Filecoin Foundation, told PYMNTS that one of the biggest questions surrounding the regulation is whether stablecoins have to be one-to-one backed by U.S. dollars, arguing that this rule would be “above and beyond” what is asked of other sectors.
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