Earlier this month, PayPal, the global payment processing titan, revealed PayPal USD (PYUSD), its own stablecoin.
Pegged to the US dollar and built on Ethereum’s technology (via Ethereum’s ERC-20 token, where many alternative cryptocurrencies are generated atop), PYUSD is set to become a vital part of PayPal’s payment infrastructure.
This move comes after PayPal allowed its US and UK users to buy, sell, and store cryptocurrencies on their accounts.
The primary use of PYUSD will be for money transfers and as a payment method for PayPal’s vast network of merchants.
The coin will also be available on Venmo, another popular payment app owned by PayPal, and transferable to crypto wallets like Coinbase Wallet and MetaMask that support PYUSD.
Currently, the stablecoin market, worth $125 billion, is dominated by Tether, with a market cap of $86.5 billion, followed by USD Coin (USDC) with $26 billion.
PayPal’s entry into this market is significant as it’s the first major payment processor to issue a stablecoin.
However, PayPal’s move has sparked debate. Some criticize PYUSD for its centralized nature, which allows for freezing addresses and pausing transfers.
But others view this centralization as necessary for regulatory compliance and to prevent potential fraud.
PayPal’s entry into the stablecoin market could also influence cryptocurrency regulations in the US.
As a significant player, PayPal’s involvement might push for more precise and updated regulations in the crypto space.
With the current regulatory scrutiny on stablecoin issuers in the US, experts believe PayPal’s venture could change the tide.
PayPal’s PYUSD is a significant step in bridging the gap between traditional finance and the crypto world.
With over 400 million customers globally, PayPal’s entry into the stablecoin market could drive the adoption and acceptance of cryptocurrency in mainstream finance.