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

  • Norway central bank hikes rate to 4% to combat high inflation

    TL;DR Breakdown Norway’s central bank has decided to increase the primary interest rate by twenty-five basis points to 4%. The central bank emphasized the necessity for a moderately higher policy rate to realign inflation with the target. Description The Norway central bank announced its decision to increase the primary interest rate by twenty-five basis points in response to elevated inflation on Thursday. This move by Norges Bank takes the rate to 4%, a threshold not seen since 2008. The central bank pointed out that despite a slight decrease, inflation, which soared to 5.4% … Read more The Norway central bank announced its decision to increase the primary interest rate by twenty-five basis points in response to elevated inflation on Thursday. This move by Norges Bank takes the rate to 4%, a threshold not seen since 2008. The central bank pointed out that despite a slight decrease, inflation, which soared to 5.4% in July, continues to persist significantly above the desired 2% target. The central bank emphasized the necessity for a moderately higher policy rate to realign inflation with the target….

    Article 2023年8月18日
  • Tether emerges as a key Bitcoin holder fueling market speculation

    TL;DR Breakdown Tether has ranked as a major Bitcoin holder across the world fueling market speculation. The implication of the company’s role in the crypto landscape. Description In a significant development, Tether, a prominent stablecoin issuer, has quietly risen to become the 11th largest holder of Bitcoin globally. This revelation has ignited curiosity and speculation within the cryptocurrency market regarding the potential impact the firm could wield. While Tether has refrained from officially disclosing its Bitcoin addresses, Tom Wan, a research analyst … Read more In a significant development, Tether, a prominent stablecoin issuer, has quietly risen to become the 11th largest holder of Bitcoin globally. This revelation has ignited curiosity and speculation within the cryptocurrency market regarding the potential impact the firm could wield. While Tether has refrained from officially disclosing its Bitcoin addresses, Tom Wan, a research analyst at 21.co, claims to have identified an address that is potentially linked to the firm. Tether address holds about $1.6 billion Bitcoin This Tether address is said to currently hold approximately 55,022 bitcoins, with an estimated value of around $1.6…

    Article 2023年8月6日
  • Robert F. Kennedy Jr. criticizes SEC’s approach to crypto regulation, calls for change

    TL;DR Breakdown Robert F. Kennedy Jr., the U.S. presidential candidate, criticizes the SEC’s regulatory approach to cryptocurrencies, calling for the appointment of crypto-friendly individuals to the commission if he is elected. Under Chair Gary Gensler, the SEC has faced criticism for its enforcement-centric strategy and lack of regulatory clarity, with Coinbase taking legal action against the SEC and a congressman proposing the removal of the chairman. Kennedy highlights the advantages of Bitcoin, emphasizing its trustworthiness, democratic decision-making process, and intrinsic value while expressing concern that the SEC prioritizes banks over the interests of the American people. In a recent interview with TheStreet, U.S. presidential candidate Robert F. Kennedy Jr. (RFK Jr.) expressed his support for the cryptocurrency industry and criticized the Securities and Exchange Commission (SEC) for its regulatory approach. Kennedy, a well-known environmental attorney, and activist, emphasized the need for crypto-friendly individuals on the SEC Commission and accused the regulator of protecting banks rather than the American people. Kennedy, the nephew of former U.S. President John F. Kennedy and son of former U.S. Attorney General Robert F. Kennedy, highlighted…

    Article 2023年6月2日
  • Atomic Wallet faces class action lawsuit over $100 Million crypto hack losses

    TL;DR Breakdown About 50 Russian and CIS clients launched a class action against Atomic Wallet after a $100 million crypto heist. The breach affected over 5,500 accounts; a Ukrainian group may have orchestrated the heist, challenging initial blame on North Korea’s Lazarus Group. Description A group of high-net-worth investors from Russia and the Commonwealth of Independent States has launched a class action against Atomic Wallet following a $100 million heist that has left investors reeling. The legal action is being coordinated by German lawyer Max Gutbrod and Boris Feldman, a co-founder of Moscow firm Destra Legal. Gutbrod, who was … Read more A group of high-net-worth investors from Russia and the Commonwealth of Independent States has launched a class action against Atomic Wallet following a $100 million heist that has left investors reeling. The legal action is being coordinated by German lawyer Max Gutbrod and Boris Feldman, a co-founder of Moscow firm Destra Legal. Gutbrod, who was once a partner at Baker & McKenzie in Moscow for more than 20 years, has stated that a group of lawyers is currently…

    Article 2023年8月24日
  • Digital Yuan adoption soars as Minsheng bank and JD.com join forces

    TL;DR Breakdown Minsheng Bank partners with JD.com to launch a digital CNY payment solution. Incentives offered by Minsheng Bank aim to encourage the widespread use of digital yuan on JD.com. Minsheng Bank is a non-state entity in China’s expanding digital yuan experiment. Description Minsheng Bank of China, a pioneer in digital yuan adoption, has partnered with e-commerce giant JD.com to launch an innovative digital CNY-powered payment solution. The collaboration aims to bring the benefits of China’s Central Bank Digital Currency (CBDC) to Minsheng Bank clients in the CBDC trial zone, offering them seamless CBDC payments on JD.com by … Read more Minsheng Bank of China, a pioneer in digital yuan adoption, has partnered with e-commerce giant JD.com to launch an innovative digital CNY-powered payment solution. The collaboration aims to bring the benefits of China’s Central Bank Digital Currency (CBDC) to Minsheng Bank clients in the CBDC trial zone, offering them seamless CBDC payments on JD.com by linking their digital wallets with their JD accounts. As reported by Shzhidao via Sohu, the partnership aims to encourage widespread use of the digital…

    Article 2023年8月8日
TOP