Payments giant launches stablecoin

PayPal yesterday revealed plans to launch its own dollar-pegged stablecoin, PayPal USD (PYUSD). It'll run on Ethereum.

Soon, promises the payments giant, users in the U.S. can transfer PYUSD between PayPal and supported external digital wallets. PYUSD can be used as a means of payment; and it also will convert to/from PayPal's supported cryptocurrencies.

This is the first time a major financial company is issuing its own stablecoin, CoinDesk pointed out.

Total crypto assets ($1.22 trillion) are +0.8% since the big reveal on Monday.

Bloomberg broke the story. A key U.S. lawmaker, Rep. Patrick McHenry (R-North Carolina), chairman of the House Financial Services Committee, had a statement ready to go: “This announcement is a clear signal that stablecoins, if issued under a clear regulatory framework, hold promise as a pillar of our 21st century payments system.”

McHenry used the occasion to advance his committee’s pro-stablecoin bill, the Clarity for Payment Stablecoins Act, which is still working its way through Congress (CryptoSlate).

PayPal's new stablecoin is "a strong signal that near-instant, borderless, and programmable payments in the form of stablecoins are here to stay,” said Jeremy Allaire, co-founder/CEO of Circle, issuer of stablecoin USD Coin (USDC).

In terms of potential to bring order to the digital money space, PYUSD represents a "watershed moment," per Paxos, PayPal's partner on the project. Paxos being under the purview of the New York State Department of Financial Services – overseeing all issuance activities including the management of reserves – means that "no matter where you are in the world, anybody who has this token is protected by the oversight and the rules that are set for us by the state of New York,” said Walter Hessert, head of strategy at Paxos (CoinDesk).

Whether there's room for another USD stablecoin is the subject of an ongoing debate. For his part Allaire seems unfazed.

Wider crypto reactions to PayPal's foray comprise a mixed bag of emotions, Decrypt said, ranging from the type of delirium that surrounded BlackRock's plan to launch a spot Bitcoin ETF to half-yawns and invocations of the phrase "nothingburger."

Still, the news has "the whole industry talking," Decrypt added.

PayPal's announcement that it’s launching its own stablecoin didn't quite throw the crypto world into a tizzy.

For example, Ethereum, on which PayPal USD will run, recorded a 0.0% move in 24 hours as of Tuesday at 7:30 a.m. (EST), according to CoinGecko.

The non-fungible token (NFT) sector seems slightly more jazzed by PYUSD, said Yehudah Petscher, Forkast Labs' NFT strategist. "They're looking forward to an easy way to onboard the masses to crypto,” Petscher said.

Ethereum’s 24-hour NFT sales rose 19% to $8 million. Sales of the Mutant Ape Yacht Club collection rose 26% to roughly $630K on route to becoming the best-selling Ethereum-native NFT collection at the moment. At the same time, though, Mutant Ape's kindred collection, the Bored Ape Yacht Club, saw sales decline 10%.

Meanwhile, ApeCoin's struggles continue. Last week at this time, APE fell to $1.77, an all-time low. APE, the 64th-largest coin, has since climbed above $1.80 but it remains down 10% over the past two weeks.

Crypto is poised for a huge comeback, possibly to be triggered by the Bitcoin halving next spring, snuffing out so-called crypto winter for good, or so holds a growing contingent of glass-half-full onlookers.

Well, Concordium's founder, Lars Seier Christensen, is not among them. In fact, he has a bucket of cold water he’d like to get off his chest – and dump all over the yaysayers.

"This new rally? Not going to happen," Christensen said.

His Op-Ed in Blockworks took issue with a preponderance of projects he deemed "silly and speculative."

Christensen's pessimism is rooted in his belief that trust has been lost and retail masses are unlikely to jump back on the bandwagon. He suggests looking forward to any projects and blockchains that support a transition toward more, not less, compliance, while avoiding those that “already had their time in the sun."

"Although there won’t be a crypto market rally, as many hope," he adds, "there will eventually be a blockchain industry rally in the future."