For the past few days, an unusual event has marked crypto and blockchain news. The issuance by Paxos Trust Company of PayPal’s stablecoin, a stablecoin with striking potential. Paxos, the company that also issued Binance’s BUSD, marks a new milestone by issuing a stablecoin that stands out from the rest on strategic points. Asked by the press, Walter Hessert, the head of strategy of Paxos, explains, point by point, how the PYUSD differs from all the stablecoins currently on the market and how it risks becoming a real threat to existing stablecoins.
According to Paxos, PYUSD cannot be compared to any other stablecoin
Last Tuesday, as part of a press interview, Walter Hessert, the head of strategy of Paxos, expressed his opinion on the stablecoin PYUSD issued by his company Paxos on behalf of the payments and settlements giant, PayPal company.
In fact, the famous payment company PayPal had already integrated crypto products into its platform for several years. It had thus enabled its users to perform various operations involving cryptos, including purchases, sales and storage of cryptocurrencies. But this time, PayPal created a surprise by launching its stablecoin PYUSD.
As if that was not enough, Walter Hessert indicated that his company was still working on other stablecoin projects somewhat similar to PayPal’s PYUSD. Whether he is hinting at a possible plan to develop a stablecoin for Elon Musk’s social network X is unclear. Hessert did not want to be more precise and direct.
However, nothing excludes this possibility, when we know that Elon Musk recently indicated that we could make the social network “the largest financial institution in the world”. However, he indicated that Paxos is currently collaborating on other stablecoin projects with companies that, like giant PayPal, have the ability to shift the boundaries of blockchain product adoption. PayPal, for example, as can be seen on the company’s official website, in 2022 made a total volume of $22 billion in payments.
A PYUSD integrated into products used every day and which will multiply the use cases
The particularity with this stablecoin, as the head of strategy of the company Paxos indicates, is that the avenue of PYUSD will favor the proliferation of use cases. For good reason, PayPal’s stablecoin is integrated into everyday products and services. For example, the PayPal platform supports more than 70% of all transactions made on the Ebay platform, or nearly $51.8 billion.
Unlike other stablecoins that are not directly associated with specific use cases, PYUSD comes directly to market with real and proven utility. In addition, the integration of PYUSD on the Ethereum blockchain opens the way to this ERC20 token.
This can now be chosen by developers for the integration of in-app payment modules in virtual spaces or as part of the design of Web3 applications or Web3 wallets.
Between PYUSD and other stablecoins, there is a big difference: according to Paxos Trust Company
Even though the launch of PYUSD was not celebrated in the industry, PYUSD comes as something of a game-changer for the crypto industry. While it is true that some still believe that the PYUSD is just added to the list of existing stablecoins, claims that the PYUSD token has unique characteristics that are not found in any other stablecoins.
Indeed, at the moment, the only major cryptocurrencies in the crypto market are USDT and USDC. The launch of the Tether company’s USDT dates back several years and it was in collaboration with Coinbase that the Circle company’s USDC was issued.
Currently, the market capitalization of the former reached $83.2 billion last June, while that of USDC was $26 billion, knowing that the overall market capitalization of stablecoins is almost $125 billion. .
Unfortunately or fortunately, neither USDC nor USDT is regulated, unlike PYUSD. PYSUD is said to be a 100% regulatory compliant and bankruptcy-protected stablecoin whose launch comes at a time when investor confidence has been repeatedly tested.
In addition, PayPal’s PYUSD is issued by the Paxos Trust Company which is entirely under the supervision of the NYFSD, the New York Department of Financial Services, which will be responsible for overseeing the issuance of the stablecoin and the management of its reserves.
Additionally, the reserves of the stablecoin are 100% backed by dollar deposits, US treasury bonds, and more. Paxos has indicated that it will publish a monthly PYUSD reserve report as of September 2023.
It also promised to publish a certificate issued by an independent third-party firm proving the value of the reserves in USD constituted for the stablecoin. PYUSD holders therefore benefit from excellent protection against the risk of bankruptcy.
Paxos issues a stablecoin that could shake up the crypto industry
PayPal’s new stablecoin issued by Paxos comes to bolster the crypto industry’s trust capital amid the USDC receiving a slap in the face since the recent collapse of Silicon Valley Bank where a share of the reserves that secure the currency were held. ‘USDC. PayPal’s stablecoin therefore has the potential to become a competitor to the USDC.
Tether’s Chief Technology Officer, Paolo Ardoine, does not see PYUSD as a competitor to USDT, since, he argues, USDT has not yet entered the US market. This is probably without taking into account the drop that the USDT has been experiencing lately.
And even though PYUSD is currently only issued in the US market unlike Tether, PayPal’s stablecoin is coming like a comet that looks like it’s gearing up to move boundaries very quickly.
It is positioned as the best option for cross-border payments, for the settlement of purchases of products and services and also for payments made in virtual spaces. We therefore expect a multitude of use cases with this stablecoin.
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