PayPal has made a bold move in the digital assets space by investing in Mesh, a crypto startup that receives $5 million in PYUSD stablecoin from PayPal, offers a secure and convenient platform for crypto transactions. What makes this investment unique is that PayPal used its own PYUSD stablecoin, which it launched last August, for $5 million of the deal. In this article, we’ll explore what Mesh and PYUSD are, why PayPal chose to invest in them, and what this means for the future of finance.
PayPal invests in crypto startup Mesh using its PYUSD stablecoin
PayPal has made a rare investment in a digital assets startup using its own stablecoin, PYUSD, which it launched last August. The payments giant used $5 million of its stablecoin for the investment, along with $1.5 million in cash.
Mesh: A secure and convenient platform for crypto transactions
The startup that received the stablecoin investment is Mesh, a company founded by former cybersecurity experts who sold their previous venture to LogMeIn, the owner of the password manager LastPass. Their new company is also focused on secure communications, but in the context of crypto-based financial transactions.
Mesh can be seen as the crypto equivalent of Plaid, the service that allows you to connect your bank account to apps and websites by entering your online banking credentials. Mesh cofounder and CEO Bam Azizi says that the comparison with Plaid is fair, but not complete, as his crypto service has a bigger role in transferring cryptocurrencies.
This means that Mesh enables users to move funds among various platforms, such as crypto exchanges, wallets, and financial apps that support crypto. The benefit of the service, according to Azizi, is that it avoids the need for users to copy and paste a long string of characters, which is common for crypto transfers and poses a security risk. Instead, Mesh users simply use a menu within the app.
Mesh’s growth and partners
Mesh claims that hundreds of companies are integrating its services, including well-known exchanges and fintech firms, but it cannot reveal their names yet. Azizi says that the startup, which generates more than $1 million in revenue, is not profitable at the moment, but it could easily be if he wanted to.
Besides the $5 million it gave Mesh in stablecoins, which was registered on the Ethereum blockchain, PayPal Ventures also added $1.5 million in cash. This follows the startup’s $22 million Series A funding round last year, which attracted investors such as Money Forward, Galaxy, and Samsung Next.
PYUSD: PayPal’s own stablecoin
PayPal introduced PYUSD in August with the assistance of Paxos, a New York-based firm that creates white-label stablecoins. PYUSD still has a small share of the overall stablecoin market, which is valued at around $135 billion and is led by Tether, but it grew over 70% between mid-December and mid-January, and its market cap is around $300 million.
The choice to invest in Mesh using PYUSD, which is part of PayPal’s wider strategy of providing more payment options globally, seems to be aimed at boosting the usage of the stablecoin.
The potential of Mesh and stablecoins for the future of finance
The investment by PayPal in Mesh using its PYUSD stablecoin reflects the growing interest and innovation in the field of digital assets and embedded finance. Mesh and stablecoins offer a secure, convenient, and fast way to transfer value across different platforms and applications, without relying on intermediaries or traditional payment systems. This could have significant implications for the future of finance, as more people and businesses adopt crypto-based solutions for their financial needs.