new PayPal stablecoin
Payment platform PayPal arguably made the most pro-crypto announcement of the year yesterday when it announced the introduction of its new stablecoin, PayPal USD (PYUSD) which runs on the Ethereum blockchain. Read the release.
Like many stablecoins PYUSD is backed 1:1 with the US Dollar and this one is managed by Paxos Trust. PayPal was issued a BitLicense by New York Department of Financial Services in June 2022.
TechCrunch looks at PayPal’s crypto development history including when the company introduced crypto services back in 2020. Read it.
The significance of PayPal – with a $71 billion market cap – taking its next step in digital assets is, perhaps, the leading edge of traditional finance firms embracing digital assets and stablecoins, in particular. Equally important is the US Dollar finding another on-ramp into the Web3 ecosystem. Squeaky blockchain transactions are getting a bit more of the oil they need.
The press release explains that the rollout, which started yesterday for PayPal customers, will allow them to:
“Transfer PayPal USD between PayPal and compatible external wallets”
“Send person-to-person payments using PYUSD”
“Fund purchases with PayPal USD by selecting it at checkout2”
“Convert any of PayPal’s supported cryptocurrencies to and from PayPal USD”
Also of interest will be the monthly reserve report for the new PYUSD stablecoin which will commence publishing in September according to the company. Read more.
“In 2022, I wrote about what makes a stablecoin like USDC different from PayPal balances. Hint: It’s not just the name…” – Zach Wong on X (was Twitter)
new PayPal stablecoin – reaction
It appears that the passage of the stablecoin bill – H.R. 4766, the “Clarity for Payment Stablecoins Act of 2023“- out of the House Financial Services (HFS) Committee two weeks ago may have played a part with the launch’s timing.
PayPal SVP and GM of Blockchain, Crypto, and Digital Currencies, Jose Fernandez da Ponte, tells Bloomberg that in his view regulation for digital assets is “progressing toward more clarity.” Read more. This comes after the payments company paused its crypto efforts in February due to regulatory scrutiny.
Yesterday, HFS Chair Patrick McHenry (R, NC) followed up the PayPal news with a supportive statement saying in part: ““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….” He added, “We are currently at a crossroads to keep America at the forefront of digital asset innovation. Congress is making significant, bipartisan progress on legislation to ensure the U.S. leads the financial system of the future. We must finish the job.” Read a bit more.
Jeremy Allaire, CEO of Circle, which issues USDC, tweeted about the PayPal news, “This is what happens when we start to get regulatory clarity, and with the Payment Stablecoin Act, this can open up a free and competitive market for dollar stablecoin issuers with strong supervision, allowing the US to compete with digital dollars that are uniformly safe, transparent, liquid and supervised to Fed-standards.” Read more.
The founder of crypto publication Blockworks, Jason Yanowitz, noted the increased competition for Circle’s USDC stablecoin and added in a tweet, “It’s easy for regulators to be anti-stablecoin when shadowy supercoders create them… less easy when it’s major US financial organizations. Get ready for the stablecoin narrative to shift in DC.”
PayPal is currently looking for a “Lead Product Manager – Crypto Compliance.” See it.
SRO and digital assets certification
CoinDesk reporter Jesse Hamilton found a certification process on FINRA’s (Financial Industry Regulatory Authority) website yesterday called “Certified in Blockchain and Digital Assets (CBDA).” Though it’s on the FINRA site, disclaimers say that the powerful self-regulatory organization which operates under the Securities and Exchange Commission (SEC) is not endorsing it.
Nevertheless, the certification is offered through the Digital Assets Council of Financial Professionals led by Ric Edelman and Don Friedman who have a deep experience creating financial-related events, resources and organizations.
See the faculty and courses here.
Circle’s european policy director Patrick Hansen tweeted yesterday that the The Joint Money Laundering Steering Group (JMLSG) in the United Kingdom has published guidance on the Financial Action Task Force (FATF) Travel Rule for crypto which could be highly influential globally.
“It says ‘lightning’ transfers are in scope of the travel rule, but only the ultimate originator and beneficiary of the transaction, not the intermediary (routing) nodes,” according to Hansen. Comments on the proposal are due August 25th. Read more details here.
still more tips
Blockchain.com Receives Major Payment Institution License from Monetary Authority of Singapore – press release
Behind the scenes of Coinbase’s ambitious new Base blockchain, and what to expect from ‘on-chain summer’ – Fortune
India pushes ahead with data privacy bill despite pushback from critics – TechCrunch
Crypto’s Next Craze? Orbs That Scan Your Eyeballs (Worldcoin) – The New York Times
Opinion: Crypto identity contradiction: Blockchain anonymity meets KYC regulations – Cointelegraph