• PayPal recently announced its U.S dollar-pegged payment stablecoin, PayPal USD (PYUSD).
• Experts explain the benefits and disadvantages of PYUSD, which has the potential to affect stablecoin adoption with its large user base.
• Despite the unclear regulatory environment for digital assets in the U.S., PayPal believes “the time is ripe to modernize and upgrade the technological infrastructure of the financial system”.
PayPal’s New Stablecoin
PayPal recently announced its U.S dollar-pegged payment stablecoin, PayPal USD (PYUSD). According to a PayPal spokesperson, PYUSD is important because mainstream adoption of future digital experiences will require a stable digital instrument that is crypto-native and easily connected to fiat. The company also believes that “the time is ripe to modernize and upgrade the technological infrastructure of the financial system — and we want to help businesses and consumers adapt and engage”.
Understanding PYUSD
Industry experts are examining both the advantages and disadvantages of PYUSD, which has the potential to affect stablecoin adoption with its large user base—over 426 million active accounts worldwide with a market share of just over 50% in global online payment processing arena. According to Alex Tapscott, co-founder of Blockchain Research Institute, “stablecoins are a logical fit” for PayPal as they can be “lucrative one at a time when Tether’s recent earnings report suggests that it’s poised to post a bigger profit than Starbucks , BlackRock — even PayPal itself”.
Benefits of PYUSD
The main benefit of PYUSD is that it eliminates price volatility found in other digital currencies while enabling confident payments. Furthermore, having such an established company like PayPal support this technology could lead more people into using cryptocurrencies as well as increase trust in them due to their association with such an institution. Lastly, this would give businesses access to new markets they may not have been able to previously tap into due to certain restrictions or lack thereof on how payments are processed in those countries/areas.
Disadvantages of PYUSD
Despite all these potential advantages, there are some drawbacks associated with using PYUSD such as legal headwinds which could prevent it from being adopted by certain companies or individuals due its uncertain status within current regulations governing cryptocurrencies in many parts of the world. Additionally, many industry experts believe that it lacks some functionality compared with other existing stablecoins on the market today — making it difficult for users who may already be comfortable using something else instead..