Dan Schulman, CEO of PayPal, defended the importance of stablecoins on a Goldman Sachs investor conference call last week (7 September).
Last month, PayPal launched their signature stablecoin, PayPal USD (PYUSD). The currency is pegged to the US dollar and backed by cash or cash equivalent reserves. In the call, Schulman said: “It may be that five years from now we look back at our stablecoin launch as one of the most important and innovative things we ever did.”
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He sees the current use-case of stablecoins, as fiat to crypto on-ramps, as “step one”. The future, Schulman argues, will see the currency used for international remittances and micropayments at “a fraction of the cost [and] at transaction speeds that are seconds, not days.” Beyond that, merchants will accept the coin at a lower exchange rate than they do currently.
However, this vision currently seems optimistic. BeInCrypto reports that less than a fifth of the $44.37m of PYUSD in supply is currently in circulation and that the majority of the stock is held by the issuer of the coin, Paxos Treasury. Offering no data himself, it is unclear how Schulman sees his description becoming a reality, particularly as he’s retiring from the company at the end of this month.
Earlier this month EPI spoke to Neeraj Baid, CEO of international payments start-up Atlantic Money, who was similarly sceptical about PYUSD: “Nobody wants to hold stablecoins […] because stablecoins aren’t useful. I can’t do anything with it that actually brings me value.”
Despite the unclear benefits and low adoption, stablecoins are a growing concern in the banking and payment industry, with mentions having grown over 2,000% since 2019 and looking set to grow again this year.
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