The PayPal explained why the PYUSD stablecoin is needed
Date: 2023-08-10 Author: Karina Ziganova Categories: CRYPTO PAYMENTS, IN WORLD
PayPal CEO Jose Fernandez da Ponte explained in an interview with CNBC why the payment company launched its own PayPal USD (PYUSD) stablecoin.
“Stablecoins are a killer application for blockchains right now. There are inherent advantages in cost, programmability, computation time. Stablecoins are something that we can’t just skip,” he said.
According to da Ponte, the turbulent stablecoin market and the decline in their capitalization was the reason for the success of PayPal.
“We use all the infrastructure that we have built over the years, in terms of regulation in several countries, in terms of risk management, in terms of compliance,” a company representative explained.
Main advantages of PYUSD
He emphasized that PayPal sees the desire of users to find alternatives to existing stablecoins, and here PayPal has several key advantages. First and foremost, the company has an extensive network of over 435 million active accounts. This will allow you to easily distribute PYUSD within the system.
In addition, PayPal has a competitive advantage when it comes to connecting to fiat payments. The process of escalating — or moving money from fiat to cryptocurrency — is one of the main barriers to online payments, da Ponte said. However, the company can easily solve this issue.
Another important feature of PYUSD is interoperability. So, the infrastructure for sending PYUSD outside of the PayPal ecosystem already exists.
“PayPal won't charge a fee for this; obviously the user will need to pay a blockchain protocol fee — a fee in Ethereum — but that’s the only fee that will be included there,” he said.
How PYUSD works
On August 7, PayPal announced the launch of PYUSD. According to CEO Dan Schulman, the stablecoin will solidify the company's dominance in digital payments by enabling instant and cheap transfers without a centralized authority.
The stablecoin will be used mainly in the cryptocurrency and Web3 sectors, in particular for trading other digital tokens and in-game payments. Later, its application may spread to other areas.
