Payment juggernaut PayPal is set to venture into the crypto realm with its upcoming stablecoin, the PYUSD. As disclosed in an interview with Bloomberg by Jose Fernandez da Ponte, the company’s Senior Vice President for Blockchain, Crypto, and Digital Currencies, the stablecoin will serve as another revenue channel for PayPal, particularly benefiting from its role in payment transactions.
The PYUSD stablecoin will not only garner revenue through transaction fees but will also yield interest income from the assets propping it up – primarily US dollar deposits, Treasury bills, and similar cash equivalents. Interestingly, this has been a lucrative avenue for stablecoin enterprises and, with PayPal’s expansive network, the possibilities seem infinite. Such an approach surpasses the simple reserve monetization and may eventually infiltrate sectors like remittances and gaming.
The PYUSD, a dollar-pegged asset, is issued by Paxos – a notable blockchain infrastructure firm. While the nitty-gritty of the financial agreement between PayPal and Paxos wasn’t disclosed, the PYUSD is foreseen to initially gain traction within the crypto industry.
Expected to join global crypto exchange Huobi roster as soon as it hits the market, the PYUSD could become an enabling midpoint for fiat to crypto conversions – a game-changer in its own right. Huobi projects to solidify this prelaunch pact with zero trading fee for PYUSD/USDT trading pairs, an arrangement with a promise of wider market engagement. Though this appears promising, it’s important to factor in the increasing regulatory scrutiny in the US that could impact PayPal’s currency’s trajectory.
Echoing this sentiment, House Financial Services Committee Chair Patrick McHenry, a dependable promoter for stablecoin legislation, expressed that while stablecoins harbor prospect, they must be governed by clear regulatory rules and substantiated consumer protection measures. With the likes of Tether (USDT) and USD Coin (USDC) boasting a circulation of over $83 billion and $26 billion respectively, there is no denying the potential of stablecoins in the financial arena.
While this is a significant stride for PayPal, the imminent launch of PYUSD does tread on delicate grounds owing to suffocating US regulations. It would be intriguing to see how this venture maneuvers through the crypto industry dynamics and regulatory forbearance, and how it would ultimately fare against existing giants in the stablecoin scene.
Source: Cryptonews
