Paypal’s newly launched stablecoin, PYUSD will not affect Tether’s USDT, Tether Chief Technical Officer (CTO) Paolo Ardoino has said. Ardoino mentioned this while speaking with The Block concerning the launch of PYUSD earlier today.
He said the launch will not impact USDT in any way, because Tether doesn’t serve users in the U.S. where the PayPal stablecoin was launched.
“We don’t expect any impact on USDT,” Ardoino said during the interview. However, concerning the wider global crypto industry, he said it will be a positive addition to the crypto space.
“It’s interesting. Another stablecoin in the U.S. It could lead to the erosion of revenues for payments that have been mainly fueling Mastercard and Visa. It will also help the industry to grow further and push for sensible regulations,” he added.
PayPal launched its first stablecoin today. Backed by the U.S. Dollar, PayPal USD is “designed to reduce friction”, providing faster and cheaper cross-border payments in the virtual spaces.
rather than compete with USDT, Ardoino added that PYUSD could help decline Tether’s U.S.- based competition instead.
“It might mean an additional decline of our competition that is very much focused on the U.S. Tether instead focuses on emerging markets and developing countries,” he said.”
The stablecoin will for now be used for crypto-related and web3 applications, but PayPal hopes to make it more relevant in the mainstream as its customers opt for stablecoin payments in the future. However, the stablecoin will soon be available on Venmo as well, in order to reach more users.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” said PayPal CEO Dan Schulman
Providing real world value for blockchain
PayPal is a leading payment company based in the U.S. Though it took a while, it has become a big pro crypto company in the last few years. In 2020, the company announced support for buying, holding and trading of cryptocurrencies.
With the launch of an Ethereum-based stablecoin, PayPal has proven once again that it believes in crypto and that it wants to use it to bring more to the world.
According to Paxos CEO Charlres Cascarilla, the new token is “the most significant leap forward for digital assets and the financial industry.” He also added that Paxos and PayPal are “proving the real-world value of blockchain technology.”
PYUSD needs exchange listings to compete
As PYUSD cannot compete with Tether’s USDT because it is focused on users outside the U.S., the question is, will it affect USDC which is U.S. – based?
CEO of Enclave Markets, David Wells in an interview with The Block said that PYUSD will likely compete with USDC for customers who prefer to use a U.S.-based regulated stablecoins, but it needs listing on top exchanges to do this.
“It’s unclear when/if PYUSD will be listed on large exchanges, so it may be focused on the cross-platform payments use case to start,” Wells said. “Longer-term PYUSD will likely compete with USDC in crypto trading market share as well, potentially in DeFi marketplaces.
If nothing else, the launch of PYUSD proves that cryptocurrencies are indeed going mainstream and it’s only a matter of time before they become the preferred means of payment because of the affordability and speed of transactions.
