Paypal recently announced that it launched its stablecoin PYUSD. Let's have a look as to why and how this news is relevant. We will also have a look into reasons why and why not this token is embraced.
By the way I recently published an article about why bitcoin is crashing, if you want to learn more about it then click here.
What is Paypal
Paypal is the third biggest payment company in the world, behind only Visa and Amexrican Express. It has over 435 million accounts and is present in 200 countries. United Nations only has 193 member countries under it. To say that it is a giant in the financial world is a bit of understatement.
Paypal's journey into the cryptocurrency space can be traced back years ago. It was partly involved in the development of Facebook's coin Libra which did not see any traction due to regulatory limitations. In recent years Paypal has allowed transactions involving Bitcoin and Eth. And just last year the company allowed the transfer of crypto assets into third party wallets. Paypal is the first big mainstream company to issue its own stablecoin the PYUSD.
What is PYUSD?
PYUSD is a stable coin pretty much like Tether. It is tied to real world assets and is pegged to the US dollar. It is issued by PAXOS a blockchain company that is regulated. Who is also responsible for the stablecoins PUSD and Binance's BUSD.
Paypal's stablecoin is at the moment only available for US Customers. A move which aims to be on the good side of regulators by allowing them to have a close regulatory monitoring on transactions. Compared to other companies Paypal is the type to keep it clean. Seeking regulatory approval first before releasing to markets. PYUSD is also exlusive to the US dollar and is not pegged to any other fiat currencies from other markets.
Why PayPal created PYUSD?
Well the short answer is that there's money to be made. Blockchain technology is not only extremely robust but also offers lower transaction costs and more efficient delivery times. It is attractive in many aspects but of course the main goal would be to profit from it. For context, Tether which is the leading stablecoin holder recorded an immense $1.5B USD in its first quarter earnings.
The stablecoin market is expected to grow even further. Exponentially increasing earnings potential. And if a company that holds stablecoins has passed regulations, then they are expected to be the market leaders and will totally be the first choice for many investors. I will not be surprised that if in 3 years PYUSD will overtake Tether as they have already established a huge customer base and is already a household name.
Thru Paypal, you can exchange major crypto coins like Bitcoin and get their stable coin the PYUSD. Connections would soon be available into Venmo, and you can also transfer assets down the line to third party wallets like Metamask.
Is this good or bad?
Many in today's world can be good or bad or both. Depends on how it is viewed, and of course regulated. Always 2 sides to a coin. In one view this is great news as it could lead to the mainstream adaptation of crypto and its coins.. A move forward that would see significant growth in demand for the likes of major cyrptos like Bitcoin and Ethereum.
However, there are deep concerns, biggest one of them all is that this would be on a centralized netowrk. And if there's one mantra that crypto believers hold on to is that if it is not your keys then it is not your crypto. Which means that the company has the ability to freeze your assets, pause transactions and even wipe your account.
Personally I don't transact that much in PayPal. However, I would be in support of their stablecoin PYUSD if they would incorporate Hive and HBD. What's your take on this? I am curious on how you feel about Paypal's coin and whether you are in support of it or not.
