Silicon Valley-based payments firm PayPal announced it is launching a U.S. dollar stablecoin in conjunction with Paxos.

The new digital token will be pegged to the dollar and “gradually” made available to PayPal’s customers in the U.S., PayPal said in a press release.

Paxos will issue the coin labeled PayPal USD, or PYUSD. PYUSD will be “fully backed by U.S. dollar deposits, short-term Treasuries and similar cash equivalents."

Using PayPal's stablecoin for purchases

Eligible PayPal customers will be able to make transfers using the stablecoin from today and use it for purchases. It will be continued to be rolled out over the coming weeks.

“The vision over time is that this becomes a part of the overall payments infrastructure,“ PayPal CEO  Dan Schulman, told Bloomberg.

The …