A new cowboy in town. The Wild West of cryptocurrencies as some like to call itis attracting more and more business. Even among the leaders of traditional finance. This new market is promising, so it would be foolish not to take advantage of it. In any case, this seems to be the ambition of PayPal, which has just announced its new stablecoin, PYUSD. It’s a plan that’s been a long time in the making, but has suffered a few setbacks. We explain everything in this article.
PayPal launches its own stablecoin on Ethereum
PayPal is far from a newcomer to the crypto ecosystem. The firm has long offered its users services for buying and holding cryptocurrencies, including BTC and ETH. It would hold more than a billion dollars in crypto on behalf of its customers. So it was clearly time to move up a gear.
In reality, PayPal has been developing its stablecoin project since 2021. It was originally intended to be launched in partnership with FTX on the Solana blockchain. A bankruptcy later, PayPal switched to the Ethereum blockchain and partnered with Paxos. The issuer of Paxos Gold also ran into legal trouble with the SEC (Securities Exchange Commission) concerning the BUSDBinance’s stablecoin. This once again delayed the project. However, after months, if not years of negotiations, it’s now a done deal: PayPal’s PYUSD is finally here.
However, the choice of the Ethereum blockchain raises questions. Despite its robustness, its user fees are notoriously high. This could prove ill-suited to a stablecoin whose purpose remains to be used intensively by all PayPal users for their daily payments.
« PayPal’s stablecoin launch on Ethereum rather than on one of its multiple layer 2 [couches secondaires moins coûteuses en frais de transaction] (…) is honestly a brilliant way to hide their exorbitant operating costs behind the blockchain’s gas charges. »
David Phelps
The choice of this blockchain is surely due to its longevity and decentralization, which makes it safer than others from severe sanctions by the US government’s armed wing, the SEC de Gary Gensler. Nevertheless, the choice of this blockchain remains debatable from a practical point of view.
>> Why limit yourself to stablecoins? Register with Binance, and save 10% in fees (commercial link) >>;
Is PYUSD a threat to USDT and USDC?
« The PYUSD is the first of its kind, representing the next phase of the US dollar on the blockchain. (…) [C’est] the world’s safest dollar-backed digital asset. »
Paxos
Could the PYUSD compete with the sector’s already well-established behemoths, the USDT from Tether and the USDC of Circle ? Some point to its technical problems. The PYUSD would work on a 2018 version of Solidity, Ethereum’s programming language.
According to Paolo ArdoinoCTO at Tether, the USDT is unlikely to be threatened by this newcomer.
« Tether’s main focus is on emerging markets and developing countries. development [et non les US]. «
The leader see rather as good news.
« Another stablecoin in the US could accelerate the erosion of payment revenues at Mastercard and Visa. It could also help the industry secure more accommodating regulation. »
For the USDC, whose market shares are more focused on the USAthe situation could prove more complex. Nevertheless, before the PYUSD becomes a serious contender, it still has some way to go.
« I think the major short-term issue is whether or not PayPal’s stablecoin will be listed on the major exchanges. »
Anders Helseth, vice-president of K33, a firm specializing in crypto research
Payment services giant PayPal has 430 million active users. And the company has chosen the Ethereum blockchain to establish its stablecoin. So wouldn’t the important information behind these lines be this? Not that a new stablecoin another fintech is born. But every day, the Ethereum network becomes more and more the foundation of this Internet of value. emerging before our very eyes.
For you, blockchain technology and cryptocurrencies will soon be at the heart of everyday life for all of us. You can gain exposure to Bitcoin, Ethereum and other tokens on the leading exchange. Register now on the Binance platformand save 10% on your trading fees by following this link (commercial link).