PayPal Launches Ethereum-Based Stablecoin PYUSD, Sparking Debate and Expectations
PayPal's launch of the Ethereum-based stablecoin PYUSD has generated mixed reactions within the crypto community. While it presents an opportunity for Ethereum to gain mainstream adoption, concerns have been raised about potential threats to decentralization and personal asset control. The stablecoin, issued by Paxos Trust Co., aims to facilitate digital payments and Web3 applications. Some view this development as a positive step towards Ethereum becoming the monetary layer of the internet.
PayPal Launches PYUSD Stablecoin on Ethereum, Raises Concerns About Centralization and Control
Paypal has introduced a new stablecoin named PYUSD, which is based on Ethereum. The crypto community has mixed reactions to this announcement, with some viewing it as a positive step towards Ethereum's mainstream adoption, while others are concerned about its potential impact on decentralization and personal control of assets. PYUSD is designed for digital payments and Web3, and will soon be available to US customers. However, some smart contract auditors have raised concerns about the centralization attack vector in the smart contract, and others have compared it to a censorship-enabled central bank digital currency.
PayPal's PYUSD Stablecoin Launch Marks "Watershed Moment" for Regulated Stablecoins, Says Partner Paxos
PayPal's launch of its own stablecoin, PYUSD, is a significant moment for bringing regulation to the stablecoin space. Unlike other stablecoins, PYUSD is overseen by a prudential regulator and customers' assets are protected against bankruptcy. Paxos, PayPal's partner on the project, highlights the difference in regulation and protection that comes with being a trust company regulated by the New York Department of Financial Services. While Tether and Circle remain dominant players in the stablecoin market, PYUSD could become a worthy competitor to USDC.
US Congressman Calls for Clear Regulatory Framework on Stablecoins Following PayPal's Payment Stablecoin Launch
Following PayPal's announcement of its payment stablecoin, United States Representative Patrick McHenry, chairman of the House Financial Services Committee, emphasized the need for a clear regulatory framework on stablecoins in the payments system. The Committee recently passed the Clarity for Payment Stablecoins Act of 2023, which recommends regulatory paths for stablecoin issuers and brings consumer protection. McHenry believes that stablecoins hold promise as a pillar of the 21st century payments system if issued under a clear regulatory framework. He also advocates for Congress to enact legislation to provide comprehensive digital asset regulation, especially for stablecoins. Additionally, the US SEC recently faced a setback in the Ripple lawsuit, with Judge Analisa Torres ruling that retail sales of XRP tokens do not constitute securities.
PayPal Launches New Crypto Stablecoin Backed by US Dollars
PayPal has introduced a new stablecoin called PayPal USD (PYUSD), which will be backed by US dollar deposits and other cash equivalents. The stablecoin will be issued by Paxos Trust Co. and will soon be available to US customers. The company had previously announced its plans to launch a stablecoin in January 2022 and is working closely with regulators to ensure compliance.
PayPal's Quarterly Operating Margin Falls Short of Forecast, Shares Drop 7% in Extended Trading
PayPal's share price dropped 7% in after-hours trading due to lower than expected quarterly operating margins, despite optimistic year-end expectations from executives. The acting CFO stated that there will still be pressure on transaction margin performance in Q3, but an improvement is expected in Q4.
PayPal Shares Plunge 80% From 2021 Highs, P/S Ratio Hits Record Low
PayPal's share prices have dropped by 80% from their 2021 peak, marking the company's largest drawdown to date. This decline has also resulted in a significant shift in its price-to-sales ratio, which has moved from a record high of 17x to a record low of 2.5x. While the exact reasons behind PayPal's downturn are not explicitly stated, analysts speculate that the company is facing intense competition and outdated technology. Despite this, PayPal announced a substantial surge in its cryptocurrency holdings in Q1 2023, revealing a remarkable 56% increase compared to the previous quarter.
MetaMask Adds PayPal as Payment Option for Ethereum Purchases in the US
MetaMask has announced that it has added PayPal as a payment option for Ethereum purchases, making it the first web3 wallet to enable users to buy ETH using PayPal. However, this new payment channel is currently only available to U.S. users. The integration also supports ETH transfers from PayPal to MetaMask, creating more self-custody adoption.
PayPal Holds Nearly $1 Billion Worth of Cryptocurrency on Balance Sheet by End of Q1 2023, According to SEC Filing
PayPal, the online payments giant, held almost $1 billion worth of cryptocurrency on its balance sheet by the end of Q1 2023, according to a filing with the SEC. The filing showed that PayPal held $943 million worth of customers' Bitcoin, Ethereum, Bitcoin Cash, and Litecoin on its balance sheet as of that time. PayPal allows customers to buy, sell, receive, send, and hold cryptocurrencies, and use the proceeds from their sales to purchase goods and services at checkout. The company also fully protects customers from unauthorized crypto purchases or sales, and from unauthorized crypto transfers up to $50,000 lifetime.
Mastercard, PayPal, and Robinhood Lead the Way in Improving Crypto On-Ramping
Cryptocurrencies are gaining popularity as traditional financial systems incorporate more efficient digital systems. However, novices may find it challenging to understand terms such as hashrate and gas fees. To improve user access, top financial institutions such as Mastercard, Robinhood, and PayPal are unveiling new crypto products and services. They are also discussing plans for better on-ramping in crypto at Consensus 2023. Mastercard has launched Crypto Credential, which seeks to provide users with a seamless on-ramping experience with blockchain technology. These innovations will boost crypto adoption among individuals due to the brand reputation of these global organizations.
