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Main topic: PayPal launches its own stablecoin, PayPal USD, pegged to the US dollar.
Key points:
1. PayPal USD is backed by US dollar deposits, short-term US Treasuries, and similar cash equivalents.
2. The stablecoin is issued on the Ethereum blockchain by the Paxos Trust Company, regulated by the New York State Department of Financial Services.
3. Users can buy, sell, send, and use PayPal USD for payments, as well as transfer it to external wallets or convert other cryptocurrencies.
Cryptocurrency exchange Coinbase is acquiring a minority stake in Circle Internet Financial, dissolving their partnership and bringing the stablecoin USD Coin fully in-house, while also adding native support for USDC on six additional blockchains, bringing the total to 15.
PayPal has launched its own stablecoin called PayPal USD (PYUSD) in the United States, aiming to eliminate price volatility in digital currencies and facilitate confident payments, despite unclear regulatory guidelines for digital assets in the country. PayPal's large user base and market share in online payment processing could significantly impact stablecoin adoption. However, there are potential advantages and disadvantages associated with PYUSD, including its potential to onboard mainstream users to the digital economy and the lack of regulatory clarity in the US.
Cryptocurrencies pegged to the dollar are posing a potential threat to Visa and PayPal, highlighting the potential in digital payments, although this trend is not yet reflected in the stock market.
Coinbase Assets will suspend trading for six cryptocurrencies, including BarnBridge, DerivaDAO, Jupiter, Multichain, Ooki, and Voyager, due to falling short of the exchange's listing standards, resulting in price plunges for the delisted assets.
Coinbase is in talks with major Canadian banks to gain support for the crypto industry in Canada as it faces regulatory uncertainty in its home country, aiming to have the banks participate in the crypto economy in the near future.
Summary: Coinbase and Circle have dissolved the Centre Consortium due to regulatory clarity issues surrounding stablecoins, with Coinbase taking an equity stake in Circle and Circle assuming enhanced responsibilities for the USD Coin (USDC) stablecoin; Binance.US partners with MoonPay to use Tether (USDT) as its new "base asset" for transactions, while Binance faces challenges with fiat withdrawals in Europe; Shopify now accepts USDC payments on its platform, and Solana Pay plans to add additional altcoins; China launches a blockchain-powered data exchange with over 300 participating enterprises.
Elon Musk's potential plan to turn Twitter into an updated version of PayPal could have significant implications for the price of cryptocurrencies like Bitcoin and Ethereum.
Circle, the company behind the USD Coin (USDC), plans to expand the support for its stablecoin to six additional blockchains in the next two months, potentially making it the most widely accessible stablecoin and fueling its adoption in various industries.
Tether (USDT) is the world's largest stablecoin with over $66 billion in market capitalization, despite controversies surrounding its collateral and reserve holdings.
Coinbase CEO Brian Armstrong shared ten emerging ideas in the cryptocurrency space that excite him, including the creation of a CPI-linked stablecoin, on-chain reputation systems, on-chain advertising, and decentralized labor markets.
The market cap of USD Coin (USDC) has been decreasing rapidly, reaching a two-year low due to a loss of trust after the banking crisis earlier this year and a drop in activity in the DeFi sphere, while its competitor Tether continues to rise in market cap; however, Coinbase remains bullish on USDC's future and aims to expand its adoption.
Stablecoins are designed to reduce crypto market volatility by tying their value to a reliable asset, providing investors with stability, transparency, and access to the financial system while minimizing risks.
Stablecoin issuer Tether has become one of the top buyers of US Treasury bills, with an exposure of $72.5 billion, ranking above several countries, according to Tether's CTO Paolo Ardoino. This highlights the relevance of USDT in emerging markets as a protection against inflation.
Coinbase Global is expanding its digital asset lending services, which could have implications for its stock and the crypto economy.
Coinbase CEO Brian Armstrong revealed in an interview that the exchange is interested in developing the next generation of stablecoins, including the concept of flatcoin, which would be backed by the Consumer Price Index (CPI) or purchasing power rather than a fiat currency.
Paxos has released a transparency report confirming that its Ethereum-based stablecoin, PayPal USD (PYUSD), is fully backed by assets, with total tokens outstanding amounting to $44.4 million held in custody, primarily in U.S. Treasury reverse repurchase agreements.
PayPal expands its crypto services with new on-ramps and off-ramps for cryptocurrencies in the United States, Franklin Templeton files for a spot Bitcoin ETF, Coinbase integrates the Bitcoin Lightning Network, and Meta is developing a new AI model to rival OpenAI's system.
Bitcoin (BTC) and Ethereum (ETH) experienced stable prices over the week, while Bitcoin Cash (BCH) and Toncoin (TON) saw notable price increases, and Stellar (XLM) suffered a decrease; Sony is developing a blockchain network in collaboration with Startale Labs, PayPal launched crypto to USD off-ramps, and Deutsche Bank partnered with Taurus for custody and tokenization services.
PayPal's stablecoin ambitions are driven by potential savings on multicurrency transactions, but Tether co-founder William Quigley believes it is unlikely to bring much innovation and may primarily serve as a cost-saving measure for PayPal. Quigley explains that stablecoins allow PayPal to bypass financial intermediaries, conduct transactions on its private blockchain, and eliminate fees associated with currency conversions. He also highlights the potential profits that stablecoin operators can earn from interest-rate increases.
PayPal's stablecoin, PYUSD, has struggled to gain traction in the market, with a market capitalization of only $43.4 million compared to stablecoin leaders USD Coin and Tether, which have market capitalizations of $83 billion and $26 billion respectively, and trading volumes for PYUSD remain low.
PayPal's stablecoin, PayPal USD (PYUSD), is now available for purchase on Venmo, allowing users to buy the cryptocurrency and marking the first instance of wallet interoperability with no costs between PayPal and Venmo.
Despite announcing its plans to eliminate secured loans, Tether, the largest stablecoin issuer, has experienced a rise in such loans in 2023, with $5.5 billion of loans in its recent quarterly report, although it aims to reduce this to zero by 2024.
Tether, the firm behind stablecoin USDT, has made a strategic investment in crypto miner Northern Data Group in support of artificial intelligence initiatives and potential collaborations involving AI, P2P communications, and data storage solutions.
