Is PYUSD good for the ETH network? It was the headline news at the start of this week: this August 7, 2023, PayPal announced to launch its own stablecoin dollar housethe PYUSDwith the help of Paxos. While this stablecoin is likely to present significant centralizationanalysts from the banking multinational JP Morgan on the other hand, are optimistic for Ethereum adoption support (ETH) that PYUSD represents.
Will PayPal customers join the ranks of Ethereum users?
Since the electronic payments giant PayPal decided to get into the cryptocurrency business, it hasn’t stopped diving deeper. The launch of PYUSDits own stablecoin of the dollar, is clearly a milestone in this group’s advances within crypto-assets.
But in addition to benefiting PayPal’s interests, the mega-banking experts JP Morgan also believe that this new stablecoin could also benefit the network Ethereum. Like the reports The Block, JP Morgan’s head of strategy and chief analyst, Nikolaos Panigirtzoglouhas studied the subject, and seems to have very confident for the future of ETH blockchain.
» [Le PYUSD de PayPal] could boost activity on Ethereum, and enhance the usefulness of the ETH network as a platform for stablecoins and DeFi (decentralized finance). (…) In other words, more companies would be encouraged in the future to choose the Ethereum blockchain (or its second-layer solutions) for their stablecoins and decentralized projects. »
Nikolaos Panigirtzoglou, Head of Strategy at JP Morrgan
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Transaction costs a major obstacle?
Nikolaos Panigirtzoglou adds that PayPal’s PYUSD could also benefit from the scheduled extinction of Binance’s BUSD stablecoin (in February 2024). This would attract dollar stablecoins from the BNB Chain (BUSD’s main support) to Ethereum.
But the JP Morgan analyst makes a good point of mentioning the second-layer solutions (layer 2) of Ethereum. Because the network co-founded by Vitalik Buterin suffers from a chronic lack of saturation of its transactions, leading of gas fees (transaction fees) very high. To the point of becoming totally prohibitive for small transactions of a few dollars (because, for example, these exchange fees were 28 dollars on May 5, 2023, because of the memecoin PEPE).
Thus, in view of a mass adoption and a user base that can reach and even surpass one billion, the layer 2 of Ethereum are vital. At least, until the ETH backbone network has made the necessary updates to improve scalability. This will take another years of development and implementation.
The fact remains that the PYUSD stablecoin is still expected to more popularize the Ethereum blockchain. At least with PayPal users, and maybe with other companies. Attention however, if you are interested in this new dollar stablecoin, it unfortunately already exists dozens of fake PYUSDs from scammers Stay alert!
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