MoonPay has announced the integration of another fiat on-ramp for customers in the European Union and the United Kingdom. Customers across Europe will soon be able to use PayPal as an option to purchase crypto within the MoonPay platform.

The integration is currently live for 1% of European users, with a full rollout across the region in the coming weeks, and will not be available to residents of Croatia, Iceland, or Hungary.

In a press release, MoonPay cited PayPal’s status as the third most popular payment method in the United States, following Apple Pay and traditional bank cards. Ivan Soto-Wright, the company's CEO and co-founder, touched on PayPal’s ability to provide an easier user experience for new customers:

"This move will enable us to provide a frictionless experience and lower the barriers to entry to include new users around the world, bringing convenience and trust to our growing customer base.”

The option to use PayPal as a fiat onramp for MoonPay is already available to customers in 48 U.S. states with the exceptions of New York and Texas.

Related: PayPal proposes ‘cryptoeconomic’ rewards for sustainable Bitcoin miners.

PayPal enters the crypto ecosystem 

In August 2023, PayPal announced its U.S. dollar stablecoin, PayPal USD (PYUSD). The stablecoin is backed 1:1 by cash and short-term cash equivalents. Other overcollateralized stablecoins include Circle’s USDC (USDC) and Tether’s USDT (USDT), which is the largest stablecoin by market cap.

More recently, in May 2024, PayPal deployed PYUSD on the Solana network to leverage Solana’s high throughput and low transaction costs. PayPal's deployment on Solana was meant to facilitate regular use of the stablecoin for everyday purchases and personal transactions.

Originally launched on Ethereum as an ERC-20 token, the stablecoin was constrained by the Ethereum base layer's low 12-15 transactions per second and high costs arising from network congestion.

Shortly after the Solana deployment, PayPal announced that PYUSD on Solana would also include additional discrete privacy options known as "confidential transfers." This privacy feature allows a merchant to hide the transaction amount from the public while remaining compliant with reporting regulations.

The role of stablecoins

Stablecoins are tokenized digital representations of fiat currencies that can either be backed by real cash reserves and cash equivalents to a 1:1 ratio, or they can be algorithmic and have no cash reserves.

Algorithmic stablecoins work by using digital algorithms and automated processes to keep the value of the stablecoin pegged to the underlying currency the digital token is meant to represent.

These tokenized fiat equivalents provide liquidity, expand banking services to underserved areas, lower transaction costs, and provide a more efficient solution for cross-border payments.

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