Is PayPal’s PYUSD the future of crypto or a threat to decentralization?

TL;DR Breakdown

  • PayPal’s PYUSD stablecoin launch marks a milestone for Ethereum but raises concerns over transaction costs.
  • PYUSD’s introduction sparks fears over similarities to centralized digital currencies.
  • The crypto community’s response to PYUSD is mixed, with both optimism for broader adoption and skepticism over potential centralization.

Description

PayPal recently concluded a two-year exploratory period, culminating in the launch of its newly established stablecoin, PayPal USD (PYUSD), on August 7, issued by Paxos Trust Co. Tailored for digital transactions and Web3 applications, PYUSD functions on the Ethereum platform and is poised to make significant impacts on Ethereum’s mainstream acceptance. The stablecoin’s functionalities, such … Read more

PayPal recently concluded a two-year exploratory period, culminating in the launch of its newly established stablecoin, PayPal USD (PYUSD), on August 7, issued by Paxos Trust Co. Tailored for digital transactions and Web3 applications, PYUSD functions on the Ethereum platform and is poised to make significant impacts on Ethereum’s mainstream acceptance.

The stablecoin’s functionalities, such as purchasing, vending, retaining, and transferring, although reminiscent of a conventional checking account or an existing PayPal account, signal a substantial milestone. As the firm gears up for making PYUSD available to U.S. customers, notable figures within the crypto space, like Ethereum proponents Anthony Sassano and Ryan Sean Adams, hail the launch as a potential catalyst for Ethereum’s prominence as the internet’s money layer.

On the other hand, the initiative has attracted scrutiny concerning the potential costs linked to Ethereum transactions. David Phelps, an advocate for web3 technologies, questioned PayPal’s decision to launch the stablecoin on Ethereum’s mainnet, hinting that the move might be a clever tactic to overshadow PayPal’s own fees with Ethereum’s substantial gas costs. Moreover, the company itself seemed to acknowledge the challenge of elevated fees outside its platform.

Centralization features raise alarms

While PYUSD’s introduction could boost Ethereum’s adoption, it has also sparked concerns and debates over decentralization, individual asset control, and similarities to central bank digital currencies (CBDCs).

Expert digital asset lawyer Sarah Hodder drew attention to the alarming parallels between PYUSD and a censorship-enabled CBDC, igniting apprehensions among smart contract auditors. Specific functions within PYUSD’s smart contract, such as “freezefunds” and “wipefrozenfunds,” are seen as vulnerabilities associated with centralized control. 

Cryptocurrency researcher Chris Blec echoed these fears, suggesting that PayPal might exploit these functions at its discretion. Furthermore, critics have also expressed doubt over some of PayPal’s engineering choices, such as opting for an outdated version of Solidity to program the contract. Again some have maintained that the new stablecoin from PayPal isn’t something new with the fresh hype surrounding it. At present, the stablecoin lacks genuine decentralization and borderlessness, meaning it cannot function as a worldwide reserve currency that people who are excluded from traditional U.S. payment systems can use, such as those in Argentina or Russia. Therefore, the practical uses of the stablecoin for everyday consumers remain somewhat uncertain.

But others, including lawmakers like Patrick McHenry, the United States House Committee on Financial Services chair, view PYUSD as a promising component of the 21st-century payments system.

Despite minor fluctuations in Ethereum’s price post the announcement, the cryptocurrency community’s response has been mixed, reflecting a range of reactions from optimism for broader adoption to skepticism over potential centralization and censorship capabilities. Nonetheless, the next few weeks will be pivotal as PayPal plans to roll out PYUSD, setting the stage for both opportunities and challenges in the crypto industry. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:Is PayPal’s PYUSD the future of crypto or a threat to decentralization?

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年8月9日 05:47
Next 2023年8月9日 07:44

Related articles

  • Apple threatens to ban popular social media App over Bitcoin tipping

    TL;DR Breakdown The creators of the decentralized social media app Damus revealed that they had received a warning letter from Apple, stating that their app could be removed from the Apple app store. The integration of the Lightning Network widget enabled Damus to facilitate Bitcoin payments and tips directly on their platform which Apple claimed violates their policy. Many other cryptocurrency proponents questioned why tipping features on Twitter are permissible while Damus’s implementation of the same feature violates Apple’s policies. On June 13, the creators of the decentralized social media app Damus revealed that they had received a warning letter from Apple, stating that their app could be removed from the Apple app store. The reason behind this potential removal is the app’s “Zaps” feature, which allows users to tip each other and content creators in Bitcoin. The integration of the Lightning Network widget enabled Damus to facilitate Bitcoin payments and tips directly on their platform. However, Apple claimed that this feature violates their policy, which strictly prohibits any form of tipping other than through in-app purchases. According to Apple’s…

    Article 2023年6月16日
  • Bitstamp announces temporary suspension of select altcoins for US customers

    TL;DR Breakdown Bitstamp has announced the temporary suspension of select altcoins for users in the United States. Exchanges respond to regulatory scrutiny with token suspensions. Description Cryptocurrency exchange Bitstamp has announced its decision to suspend trading of several cryptocurrencies for customers based in the United States starting from August 29th. The move comes in response to recent developments, although the specific reasons behind the suspension were not detailed in the announcement. The seven cryptocurrencies affected by this decision are AXS, Chiliz … Read more Cryptocurrency exchange Bitstamp has announced its decision to suspend trading of several cryptocurrencies for customers based in the United States starting from August 29th. The move comes in response to recent developments, although the specific reasons behind the suspension were not detailed in the announcement. The seven cryptocurrencies affected by this decision are AXS, Chiliz (CHZ), MANA, MATIC, Near, SAND, and Solana. Bitstamp asks users to clear the affected tokens before August 29 All of the affected tokens have faced allegations by the U.S. Securities and Exchange Commission (SEC) of being unregistered securities in complaints against…

    Article 2023年8月10日
  • Experts think the Fed nightmare isn’t ending anytime soon

    Description The US Federal Reserve, that cumbersome entity steering our economic ship, seems poised to throw another curveball our way. Despite the hopes and dreams of investors everywhere, it looks like we’re in for yet another interest rate hike, potentially pushing past the already daunting benchmark level of 5.25-5.5%. A figure, mind you, that’s the highest … Read more The US Federal Reserve, that cumbersome entity steering our economic ship, seems poised to throw another curveball our way. Despite the hopes and dreams of investors everywhere, it looks like we’re in for yet another interest rate hike, potentially pushing past the already daunting benchmark level of 5.25-5.5%. A figure, mind you, that’s the highest in 22 years. The financial bigwigs, the ones you see making flashy predictions on TV, have been laboring under the belief that the current restrictions will be enough to wrestle inflation to the ground, hoping to see the rates stabilize into 2024. Oh, how wrong they might be. Contradicting the Market Mood A recent survey, conducted with some fancy partnership between the Financial Times and the…

    Article 2023年9月18日
  • Kraken resolves issue with Ethereum funding gateway after brief delay in withdrawals

    TL;DR Breakdown Kraken, a cryptocurrency exchange, resolved a critical issue with its Ethereum funding gateway on July 30th, which could have caused significant transaction delays. The exchange’s prompt investigation and technical expertise led to an efficient resolution, minimizing disruption to users. After addressing the issue, Kraken updated its status page to inform users that all systems were operational, allowing Ethereum-related transactions to proceed without potential delays. Description On July 30, cryptocurrency exchange Kraken made an announcement regarding the resolution of a critical issue with the funding gateway of Ethereum, the world’s second-largest cryptocurrency. The problem, which had the potential to cause delays in deposits and withdrawals, prompted the company to investigate promptly to address the concerns of its users. Earlier that day, … Read more On July 30, cryptocurrency exchange Kraken made an announcement regarding the resolution of a critical issue with the funding gateway of Ethereum, the world’s second-largest cryptocurrency. The problem, which had the potential to cause delays in deposits and withdrawals, prompted the company to investigate promptly to address the concerns of its users. Earlier that day,…

    Article 2023年7月31日
  • Bitcoin is CPI resistant, with a slight drop to around $29.5K

    TL;DR Breakdown Bitcoin seems unaffected by the latest CPI data, which showed a modest amount of CPI growth that was in line with what economists predicted. Aside from macroeconomic factors, analysts continue to debate why Bitcoin won’t budge above $30,000. The U.S. headline CPI released by the Labor Department on Thursday gained 0.2% in July, raising the inflation indicator to 3.2%. Description Bitcoin and ether open unchanged in Asia, undoubtedly unaffected by the latest Consumer Price Index (CPI) data. The two largest cryptocurrencies continue to withstand macro-scale surges. CPI is one of the Federal Reserve’s primary considerations when determining interest rate policy. Last month’s June report was the lowest in two years, and broad expectations point to … Read more Bitcoin and ether open unchanged in Asia, undoubtedly unaffected by the latest Consumer Price Index (CPI) data. The two largest cryptocurrencies continue to withstand macro-scale surges. CPI is one of the Federal Reserve’s primary considerations when determining interest rate policy. Last month’s June report was the lowest in two years, and broad expectations point to another decline in July. And…

    Article 2023年8月11日
TOP