Paypal launches own stablecoin for 430 million users

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Last Updated on 6 November 2023 by CryptoTips.eu

We thought the biggest news of 2023 would be the many requests for a Bitcoin ETF (Exchange Traded Fund) from so many Wall Street financial giants, or even XRP’s victory against the SEC. According to various media this week, the fact that Paypal, the electronic payment company very popular with young people, is starting its own stablecoin (called Paypal USD, PYUSD), is way more important. Of course, Forbes is known to exaggerate.

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Tether

You of course know about stablecoins, the digital coins that allow you to temporarily convert your Bitcoin or Ethereum into a stablecoin that is linked to the value of a major known fiat currency, such as the US dollar or the Euro. The most famous stablecoin is still Tether.

The fact that Paypal, which boasts some 430 million users, is now also starting a stablecoin, should be interpreted as a belief on the part of Silicon Valley that crypto will continue to play a major role in the coming decades. The more important question is whether others, such as Apple Pay and Square’s Cash App, will follow suit.

Paypal was founded by Elon Musk and Peter Thiel (and other members of the so-called Paypal Mafia), so it is still very much a leader in the world of technology and finance.

Fee

Paypal is starting its own stablecoin because it counts on the fact that in the future young people will not only want to pay with dollars, but also with crypto. Paypal’s business model counts on them charging a miniscule fee to shops per electronic payment, but if users do not first convert their crypto, which is for example traded via the Ethereum blockchain, to Paypal’s stablecoin, the company cannot charge that fee.

By offering a stablecoin, Paypal ensures that it can now also charge a fee for payments in crypto. Already last year, Paypal allowed its US customers to trade Bitcoin and Ethereum. This is just an extension of that offering, but a very important one.

In an interview with business site The Street, analyst Aaron Arnold explained that:

400 million plus, plus, plus people can instantly be connected to any crypto app they want, Web3 apps, different exchanges, different wallets, and you gotta think that all of PayPal’s competitors — Apple Pay, Square’s Cash App — are looking at this and going, ‘I feel FOMO because I don’t want to get left behind.

PayPal isn’t setting themselves up to be good for 2024 or 2025, PayPal is setting themselves up to be leaders in crypto for the next decade, he concluded.

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Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
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