The announcement marks the first such move from a top U.S. financial technology firm

PayPal is rolling out a stablecoin for payments and transfers, the firm announced on Monday. PayPal USD (PYUSD) is issued by Paxos Trust Company and is backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents. The payment giant says the stablecoin is rolling out to U.S. customers gradually. The announcement marks the first such move from a top U.S. financial technology firm.

Eligible U.S. PayPal customers who buy PYUSD will be able to transfer PYUSD between PayPal and compatible external wallets, send person-to-person payments via PYUSD, fund purchases with PYUSD by selecting it at checkout and convert any of PayPal’s supported crypto currencies to and from PYUSD.

PayPal says that when you buy or sell crypto currency, including when you check out with crypto, it will disclose an exchange rate and any fees you will be charged for that transaction.

PYUSD is designed to lessen friction for in-experience payments in virtual environments, enable fast transfers of value to support friends and family, send remittances or conduct international payments, facilitate direct flows to developers and creators, and support the continued expansion into digital assets by the biggest brands in the world, PayPal stated in a PR. Most of the existing volume of stablecoins is used in web3-specific environments — PYUSD will be compatible with that ecosystem from day one and will soon be available on Venmo.

As an ERC-20 token issued on the Ethereum blockchain, PayPal says PYUSD will be available to a growing community of external developers, wallets and web3 applications; can be easily embraced by exchanges; and will be deployed to power experiences within the PayPal ecosystem.

A stablecoin is a type of crypto currency whose value is tied to an external asset, such as the U.S. dollar. There is some controversy around stablecoins. Last year, Meta ended up abandoning its plan of having its own stablecoin, called Diem, after regulatory backlash. PayPal itself paused working on its stablecoin earlier this year amid regulatory scrutiny of crypto.