PayPal's Stablecoin Will Boost Activity on Ethereum Network

11.08.2023

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PayPal has recently announced the launch of its own stablecoin, PYUSD, pegged to the US dollar. This will allow PayPal users to buy, store, and exchange cryptocurrency through their PayPal accounts. The PayPal stablecoin (PYUSD) is issued on the Ethereum blockchain, with its price pegged to the US dollar at a 1:1 ratio.

PYUSD is integrated into the payment systems of PayPal, Venmo, and Braintree. This allows it to be used for instant payments at businesses that accept PayPal. Users can buy, store, and exchange PYUSD through the PayPal mobile app without any fees.

It’s worth noting that after the recent launch of PYUSD, numerous fake PayPal USD stablecoins appeared on the Ethereum, BNB Chain, and Base networks. Fraudulent tokens with similar names such as PayPalUSD, PaypalUSD, PYUSDT, and others were registered. In several cases, users mistakenly purchased the counterfeit tokens, mistaking them for the original due to the resemblance in names.

JPMorgan Analyst: «PayPal’s Stablecoin Will Boost Ethereum Network Activity»

JPMorgan investment bank analyst Nikolaos Panigirtzoglou believes that the launch of PayPal’s PYUSD stablecoin will help attract more users to the Ethereum network. More companies will be motivated to choose the Ethereum blockchain (or L2 on Ethereum) for their stablecoins or decentralized projects.

JPMorgan analysts also noted that PayPal’s entry into stablecoins will have a positive impact on collaboration between traditional and decentralized projects.

However, some experts criticized PayPal’s choice of Ethereum for the PYUSD launch, given the high transaction fees on that blockchain. For example, Sei Network co-founder Jayendra Jog said that gas fees for using PYUSD will be huge, and traders won’t want to use it. To improve user experience, PayPal will either have to pay transaction costs or gain support for PYUSD on other blockchains with lower fees.

Overall, the integration of the stablecoin into PayPal’s payment infrastructure has the potential to attract millions of new cryptocurrency users worldwide. If you are looking to start a crypto business and are interested in integrating PYUSD payments into your crypto projects, please contact our crypto legal services specialists.

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