The year 2023 has already been one for the record books, with some of the biggest recent developments in crypto’s short history. Ranging from Bitcoin becoming a safe haven during bank collapses, Ordinals and BRC20 tokens coming to Bitcoin, Ethereum being upgraded and withdrawals from staking finally being implemented, Ripple/XRP winning their lawsuit against the SEC, Litcoin’s halving, and also the news that shocked the world; BlackRock applying for a spot Bitcoin ETF.
All of these were major developments that arguably could be one of the biggest stories in any given year in crypto. However, 2023 isn’t just any year, and just this week possibly the biggest news to happen in the cryptocurrency market was announced.
Paypal announced the creation of their own stablecoin, PayPal USD (PYUSD), that would be built on Ethereum.
Initially, this might not seem like huge news, as there are already countless other stablecoins on the market. However, this is news that is going to change everything.
Paypal is one of the largest companies in the world, especially in the financial market. These types of decisions aren’t made lightly. It is a signal to the world that the future is in crypto, and that PayPal is shifting their entire business model in that direction.
It is also a warning shot to banks all over the world. That their time is coming to an end, and that cryptocurrency is the future. One of the biggest announcements during the last bull cycle was when Paypal announced the ability to buy Bitcoin and other crypto on their app. This news alone caused Bitcoin’s price to skyrocket. PayPal boasts over 500 million users worldwide, and now these users will have an incredibly easy on/off ramp to crypto. Easily sending stablecoins around the world is far cheaper than many people could before. Then also having the ability to exchange that stablecoin for other cryptocurrencies such as Ethereum or Bitcoin. Most people are underestimating how much of a game-changer this will be, and how it will expose a much large number of people to the cryptocurrency market.
For a long time, people in the cryptocurrency market have been wondering what the next catalyst will be that not only ignites the next bull market but sends prices to the levels that we have been hearing about for years. Some have predicted that it will be NFTs, others think it will be gaming, the next Bitcoin halving, the spot Bitcoin ETF someday being approved in the US, and perhaps a new development taking place on Ethereum. However, the truth in all of these is that we just need to see more adoption to help this market go mainstream. That is exactly what PayPal having their own stablecoin will help to do.
While there is no denying the positives that come with PayPay having a stablecoin, and signaling to the rest of the financial/tech world that crypto is the future. There are also concerns that we need to be aware of.
First and foremost, we need to remember that PayPal does have a history of censoring people and even freezing funds on its platform. Therefore, we should expect this to continue to be the case in the future. They will follow regulations extremely closely, it will be a centralized service, and this presents risk.
The good news is that you won’t be forced to use PayPal’s stablecoin, and there are several other options. However, just like with exchanges and Coinbase, the ease of use that comes with using PayPal’s service for newcomers will make it a great starting point for those people. Then once they gain experience, they can venture out and use other services.
The announcement of PayPal creating their own stablecoin will be news that is overlooked by many, but shouldn’t be underestimated. The wave of adoption is coming, and it is coming fast. It isn’t a coincidence that BlackRock announced they were filing for a spot Bitcoin ETF, and PayPal’s announcement happened so close to each other. The signs are all there, and it is pointing to the next bull cycle kicking off very soon.
How about you? What do you think about the news of PayPal creating its own stablecoin
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