Tether co-founder assessed the prospects for using PayPal's stablecoin
Date: 2023-09-19 Author: Karina Ziganova Categories: BUSINESS
Tether co-founder William Quigley said this in an interview with CoinDesk.
“I don’t think there will be much innovation from PayPal. I believe they look at it mainly from the point of view of cost savings, some of which they may or may not share with end users,” the entrepreneur said.
In 2015, Quigley left Tether. He was an early investor in PayPal, but no longer owns shares in the company.
According to him, the payment giant has been eyeing stablecoins for 7-8 years for potential savings when conducting multi-currency transactions by eliminating intermediaries.
Launching a “stable coin” involves a company purchasing a basket of currencies that will be held in banks around the world. According to Quigley, once these deposits are tokenized, PayPal receives a multi-currency money supply free of any third-party fees for cross-border transactions.
As a result, the company was able to avoid real currency exchanges involving intermediaries - only token swaps, he added.
“All transactions are now carried out on its private blockchain outside of the Visa network and the banking system. We no longer have intermediaries, only PayPal,” the entrepreneur concluded.
According to him, the company charges 2% from consumers and merchants for cross-border payments. In his opinion, the use of a stablecoin opens up two possible paths for the company.
“PayPal can continue to charge currency conversion fees on every transaction, even if it no longer incurs those costs, and retain 100% as additional profit. Or it could remove fees and reduce customer costs for cross-border transactions,” Quigley said.
On August 8, PayPal announced the launch of a program that is pegged to the US dollar PYUSD based on Ethereum.
Members of the crypto community have received mixed reactions to the stablecoin. Some believed that PYUSD contributes to the mass adoption of digital assets, others pointed to the risks of centralization.
Bank of America experts admitted that the launch of a “stable coin” will increase the efficiency of payments and improve the quality of customer service, but the implementation of the asset is unlikely to be large-scale.
The Paxos company, which is the issuer of the stablecoin “PYUSD”, confirmed 100% backing of the coins already in September.
