PayPal backs crypto security startup Mesh with its PYUSD stablecoin

2024-01-30 08:18:55

International payment giant PayPal has completed its first investment using its stablecoin PayPal USD (PYUSD).

In a press release on Jan. 29, the San Jose-headquartered payment company said that its investment branch, PayPal Ventures has thrown its support behind Mesh, a crypto-focused cybersecurity startup that uses PYUSD, an Ethereum-based stablecoin.

This move marks the first time that PYUSD has been used as a funding instrument. The specific financial details are undisclosed. However, the company pointed out that the investment was made “almost entirely” in PYUSD, funds transferred on-chain utilizing Mesh’s Application Programming Interfaces (APIs), PayPal added.

“As the world of financial services undergoes rapid transformation, we believe that user ownership and portability of assets will become a critical building block of product innovation, with crypto serving as the first beachhead where this is possible.”

Amman Bhasin, partner at PayPal Ventures

Established in 2020, Mesh is a fintech connection layer that provides enterprise clients with the ability to enable crypto payments, account aggregation, and trading via 300+ platforms.

This investment represents PayPal’s first use case of PYUSD for venture deals, despite the stablecoin garnering attention from U.S. regulators.

As reported by crypto.news in November 2023, PayPal faced an investigative subpoena from the U.S. Securities and Exchange Commission (SEC) regarding its stablecoin. The details behind the investigation, however, remain unclear.

PayPal launched its stablecoin in Aug. 2023 in collaboration with crypto infrastructure firm Paxos. The stablecoin is backed by U.S. dollar deposits as well as short-term U.S. Treasuries and other cash equivalents that help ensure its stability, issuers claim.

PYUSD allows users to convert digital currencies into U.S. fiat, a key feature that it hopes will spread stablecoin adoption worldwide. The latest funding arrangement with Mesh signals a more widespread approach to its web3 integration pans, with the stablecoin presently eighth out of the top ten stablecoins only a year after launch, accumulating an impressive $300 million market capitalization.

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